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In May, there was a sharp drop in NFT sales: for the first time since the beginning of 2023, they amounted to just over $300 million, which is significantly less than in recent months. What is the reason for such a decrease in interest in these tokens and what lies ahead for the NFT market?
Deterioration of indicators
In the outgoing month, the volume of sales in the NFT market amounted to only 333 million dollars, in total, 2.3 million transactions were concluded in May.
The month was a failure for this segment after the market was actively recovering from the fall of 2022 at the beginning of 2023. In January 2023, 9.2 million transactions were concluded on it, which is 37% more than in December last year. It was a record figure for the previous six months. And trading volume in January reached $946 million, up 38% from December, the highest since last June.
The decrease in interest in NFTs in May was facilitated by a sharp rise in Ethereum gas prices, as well as an increasing shift in investor attention to “meme” cryptocurrencies – primarily to the Pepe token. It was in order to participate in his airdrop that many NFT holders sold their tokens – often at a loss to themselves. In addition, the attention of investors from the NFT market is still drawn to such assets as Dogecoin and Shiba Inu.
The Ethereum gas fee was over $100 in May, which led to a sharp increase in transaction costs for NFT holders, respectively, to a decrease in the number of transactions in this market.
There are prospects
Despite the clear decline in NFT sales in May, it would be premature to say that these tokens have completely lost their former popularity. After all, this month the number of crypto wallets through which NFT transactions go has grown by almost 30% compared to the previous month. This is due to the great popularity of the Milady Maker collection that has entered the market.
So, to predict that the NFT market will gradually die in the near future will, of course, be completely wrong. The decline in sales for the first time since 2022 does not exclude the fact that this segment is still attracting the attention of investors, including through the launch of new collections on the market.
It is possible that in the coming months, the demand for NFTs will recover, and sales will increase again, returning to the $1 billion mark.
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