The hype around the Non-fungible token [NFT] space began dying down last year. The 2022 bear market certainly added to this decline. However, along with the crypto market, NFTs managed to resurrect from the dead in 2023. While several believed that this notion would be carried on throughout the year, April proved to be an unfavorable month for NFTs.
According to recent data, there were more sellers as opposed to buyers during the month. For instance, on April 26, there were only 7,907 purchasers while there were 8,641 individuals aiming to sell their NFTs.
Sadly, with just 5,893 purchasers, the NFT market touched its second-lowest point on April 19. This was relatively higher than the lowest recorded day in the previous year, which was June 18, 2022, with 5,343 buyers. The highest number of buyers in the market was 18,495 on April 5. But, once again, sellers outshined them with 36,423 in number.
Why is the NFT space crumbling?
This notion was carried on from March. Unlike the crypto market, the NFT space was gravely impacted by the U.S. banking crisis. Previous data indicated that the failure of Silicon Valley Bank [SVB] caused a decline in NFT trading volumes.
DappRadar reported that on March 12, the NFT trade volumes fell to a low of $38 million. On March 10, this drop was from a high of $74 million down to $68 million. DappRadar reported that from the beginning of March, NFT trading volume had declined by 51% in just a week.
Additionally, Ethereum, one of the most popular blockchains took a backseat with regard to NFTs. Recent data revealed that earlier this week, Ethereum was briefly overtaken by Cardano, Polygon, and Solana in terms of NFT sales. While this was short-lived, it pointed out the emergence of alt networks. Considering the fact that the Ethereum blockchain is by far the most popular choice for minting these tokens, this news was partly bearish.
How will this impact the market?
Taking into account previous and current data, non-fungible tokens seem to be losing steam. The latest decline was quite surprising considering the popularity of former President Donald Trump’s second NFT collection. However, similar to SVB, currently another prominent entity, First Republic Bank has collapsed. Therefore, it is speculated that the ongoing trend could persist going forward.
Furthermore, Amazon was expected to roll out its NFT marketplace this week. But, there seems to be no talk about the same. If the current notion continues the e-commerce giant might pull out from the development. All of this would again pose to be detrimental to the space.