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The appeal of NFTs (non-fungible tokens) appears to have dropped off. After enjoying a period of near-meteoric popularity, the value of NFT sales has been decimated over the past six months.
NFT sales for June 2022 were a little over $1 billion, compared to a peak of $12.6 billion at the start of the year. The drop in interest takes NFTs to their lowest level in a year, and it comes as the cryptocurrency markets have suffered a period of extreme volatility and price drops.
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As sales have dropped, so has the overall value of the NFT market. Worth around $3 trillion back in November, the value currently stands at less than a third of that figure. It would be easy to see the waning of interest as being a simple matter of hype wearing off, but it also seems to be related to the state of the cryptocurrency markets.
The value of Bitcoin — and other cryptocurrencies — has plummeted over the course of the past year as the realization that it is a risky investment sinks in. The drop has also been fuelled by rising interest rates and inflation.
Talking to the Guardian about the NFT slump, Chainalysis economist Ethan McMahon said:
This decline is definitely linked to the broader slowdown in crypto markets. Times like this inevitably lead to consolidation within the affected markets, and for NFTs we will likely see a pullback in terms of the collections and types of NFTs that reach prominence.
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