Effects of The Crypto Market Crash on NFTs

Crypto investors have had a chaotic month with crypto prices being all over. The fall of the crypto titan, Bitcoin, left investors in the market in a sizable catastrophe. The crypto crash took out $500 billion from the sizable $1.2trillion valuation. The bad news did not end with crypto as NFT investors also took a walk on the lonely road of despair. According to a report from chainalysis, the NFT market had a good year in 2021. investors used over $30 billion in tokens upward from $100 million in 2020

The current trend in NFTs

NFTs are a form of cryptocurrency that have digitized assets attached to them. These assets include; pictures, video files, music files, and, for whatever reasons, tweets!

Aside from making new millionaires, NFTs have revolutionalized how people view and value online art. 

Recently, the market has seen a decline as the price of crypto used in transactions surged to all-time lows. 

Apart from hacking, Bored Yacht Ape Club NFTs would have lost you more than $250,000 from a one million dollar investment in May from the market crash.

NFTs rely on the crypto market for transactions and will always be subject to the volatility of the cryptocurrency market. The price of ether dropped by 30% in May, but NFTs trading on the platform lost almost half their value. 

This price drop has led to a considerable decline in trading volume as the volume decreased by $12 billion in 4 months. According to TechCrunch, the coin base is trading less than $1million worth of NFTs and has less than 2000 users. 

The average interest that led to the exponential boom of NFTs has begun settling into significant disinterest. The search volume for NFTs on google has dropped by more than 70%, this trend shows an alarming decrease in social sentiment, unlike in previous months when NFTs appeared everywhere on social media. 

What Next

The dip in the crypto market has been shocking, to say the least. However, for a glass-half-full kind of person, this market plunge can be viewed as an opportunity to buy cryptocurrency and HODL. The Cryptocurrency market behavior is normal, expected, and like in any other market. According to a survey by Bank of America, most people hold a positive view of the future of NFTs and cryptocurrency.

Ethan McMahon, an economist at blockchain data platform chain analysis, believes that the market is starting to settle down with some companies gaining a larger share.

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