The average NFT price fell from $6800 in January to $2000 in March. Secondary sales dropped to 7,900 per day, down from 38,000 in January and all-time high of 103,765 last September. Monthly buyers dipped below 800,000 for first time since peak in January.
The market cap has dropped from a high of $23 billion to around $10 billion, losing over half its value. Google Trends shows search volume for term ‘NFT’ down 60–70% since January 2022 with a similar pattern for Metaverse.
About one year ago Beeple’s ‘Everyday — The First 5000 Days’ sold for $69,346,250. Some apes in Bored Ape Yacht Club have sold for over $3 million. Other projects, like Crypto Punks, have been equally successful, with the highest sale price of over $20 million. The rest aren’t worth the words.
Alongside the NFT boom was its counterpart, the Metaverse, which many believed would be the digital playground to use these NFTs, whether through avatar skins, items, or interacting in exclusive online communities. Zuckerberg saw an opportunity to lead the way, rebranded Facebook into Meta, and declared the Metaverse is going to be a big part of the future Internet. Meta has already blown $10 billion on this dystopian dream and expects to burn through plenty more. Like Beeple, Meta put Metaverse terminology into the public eye, and companies were eager to jump in. Mcdonald’s filed patents for a virtual restaurant. Google is picking up its DOA Glass project to reposition it for some form of Metaverse. Nike wants to be the social signal of wealth for your Metaverse avatar. The list goes on, and on.
But then the drop. Although the war has had an effect, interest was already falling due to increased regulatory scrutiny, with governments concerned about money laundering tax evasion, and more, and regulatory action is looming. Then there’s the steady stream of scams and fraud that have infested the community and the lack of protection an individual has when they lose out. Every month, a new NFT rug pull occurs (scammer drives up the price, sells, then tokens head to zero), like the “Evolved Apes” project that netted the founder nearly $3 million and left everyone else with nothing but a JPEG. They are so common that Gizmodo is now keeping a monthly track of NFT scams.
But most of all, companies and creators touting NFTs and Metaverse have yet to find worthwhile use cases for them, and public is starting to see through the self-fulfilling hype. NFT creators promise games and clubs and communities that never materialize. JP Morgan became first Metaverse bank, hoping to broker mortgages and loans for virtual property within a virtual world. Brands like Pepsi and Taco Bell offer NFT tokens to customers. Twitter allowed users to verify their NFT, and it turned their profile picture into a hexagon shape.
Oh, there was that one cool party, though, right? You be the judge.