Recent statistics do not bode well for the future of non-fungible tokens.
Non-fungible token (NFT) trading volume reached $526 million in September 2022, down from $17 billion in January of that year, according to data from Dune Analytics. According to Bloomberg’s calculations, the drop has been 97% since the peak in early 2022.
Andrea Baronchelli, a University of London professor who studies the entire cryptocurrency market, told the Observer that “it’s pretty obvious that there’s a bubble element.” “The hype around NFTs meant that normalization and a crash were inevitable,” he added.
According to Andrea Baronchelli, the crisis in the cryptocurrency industry also contributed to the fall of NFTs. However, he doesn’t think this is the end of non-fungible tokens or that this market is headed for extinction. “It’s not what it used to be, but it’s not dead,” he said.
Massive layoffs at major cryptocurrency companies such as Coinbase, BlockFLi, Gemini and Crypto.com have taken place recently, fueling instability.
In April, BitMEX laid off nearly 25 percent of its workforce “in order to optimize the next stage of the business.” Coinbase laid off 18 percent of its employees in June, and in early July, cryptocurrency exchange Gemini announced a 10 percent reduction in its workforce, also due to “a phase of contraction moving into a period of stagnation, known in the industry as cryptowinter“.
In July 2022, even the world’s largest NFT platform, OpenSea, announced that it would cut nearly 20% of its workforce.