Why Is NFT Market Declining In 2022: We Give You Five Reasons – The Indian Express
The world of non-fungible-tokens (NFTs) has plunged after the initial hype that followed their rise in popularity. Many NFTs fell sharply in value, prompting some to question their long-term viability. This was due to a combination of factors, but primarily because of the sell-off in digital assets in the last three months.
On the world’s largest NFT marketplace OpenSea, trading volume has dropped to 99 per cent in four months between May and August 2022 according to DappRadar analytics platform. For context, NFT is a new type of blockchain-based asset that is unique and cannot be duplicated. Think of it like a baseball card, or a signed jersey – something that’s one-of-a-kind, rather than something you could mass produce. That makes NFTs basically virtual assets that can be used as collateral or stand-alone tokens. That being said, there have been some major concerns over whether this technology is ready for prime time. There are valid questions about how broadly adopted NFTs will become, and whether we’re just seeing the beginning of this trend or if it’ll fizzle out soon. Today, we discuss five primary reasons why the NFT market has crashed so hard.
Tepid response to shady practices
There are a lot of sketchy projects in the blockchain space, but the NFT market is particularly rife with scams. A large portion of the NFT market is made up of shady creators selling simple assets on marketplaces. This was a ripe opportunity for scammers given the relative ease of setting up a website and selling fake pieces of art or sports memorabilia. And the market is responding accordingly. The tepid response to shady practices in the NFT market is one of the primary reasons why prices crashed so hard. The market is simply not taking off, and people are not engaging with these basic marketplaces.
Intensive crypto sell-off
The global crypto-market has shrunk from $1.02 trillion to $970.03 billion, a 15 per ce