Nfts
NFT activity continues to decline
The last two years have been difficult for the NFT market, and 2024 doesn’t look much better. With a decline in sales and investors lose appetite for digital artwork, market projections have become less optimistic, showing only a modest annual growth of 2.6% by 2028, twenty times less than this year. Additionally, the entire market is facing a substantial decline in users, showing that global interest in NFTs continues to fade.
According to data presented by AltIndex.com, the total number of active wallets in the NFT space fell to 197,000 in the first quarter, the lowest level since the start of 2021.
Ten consecutive quarters of decline in NFT users
The global NFT market is facing another turbulent year. With collectors spending less and less money on digital artwork, the total value of NFT sales recorded on EthereumBlockchains, Ronin and Flow plunged to $145 million on May 29, almost half the value seen on the same date in 2023, while total sales fell 20% to 53,900. In addition to the drop in sales and revenue, the entire market was also hit by a huge drop in users, causing the total number of active wallets to drop to the lowest level since early 2021.
According to NonFungible data, in the fourth quarter of 2021, when the popularity of non-fungible tokens skyrocketed, NFT Markets counted more than 1.9 million active wallets, five times more than the previous quarter. However, after reaching this peak, the total number of wallets trading with NFTs began to decline and has continued ever since. By the end of 2022, the number of wallets involved in NFT trading had almost halved to around one million.
However, last year saw the biggest decline, with active NFT traders plunging 78% to just 213,000 in the fourth quarter. Statistics show that the negative trend continued in 2024, with the number of active wallets decreasing by another 7% to just 197,000 in the first quarter. Additionally, this means that the total number of active users in the NFT space has continued to decline for ten consecutive quarters.
The NFT space has lost 90% of users since the market peaked in 2021
The consequences of ten consecutive quarters of declining user numbers showed devastating numbers; Over the past two and a half years, the NFT market has lost 1.75 million users, 90% of the figure seen at the market’s peak in 2021.
What is even more worrying is that this figure is likely to increase by the end of the year, as the negative trend continued in April and May. As of May 29, the NFT market had approximately 28,000 active wallets, including 13,000 unique buyers, 47% fewer than the same date last year.
The number of unique sellers dropped almost 40% during this period, from 25,900 to 15,800. A higher number of sellers indicates that supply is greater than demand in the NFT space, which may cause NFT owners to lower their prices, leading to a further decline in the market value of the NFT.
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