- Public interest in digital collectibles has started to decline.
- NFT enthusiasts no longer have great motivation to buy NFTs.
Despite starting this year on a special note, Q2 2022 wasn’t as good as Q1 2022. There has been a decline in the public’s interest in digital collectibles. Footprint analytics published a “Q2 2022 NFT industry” report on August 7, stating a 41 percent drop in NFT trading volume in Q2 2022.
The report contains a summary and analysis of the overall data in the NFT industry for Q2 2022. According to the report, the lower prices in the crypto market have caused an inflow into the NFT market for gaming, art, and collectibles since the beginning of this year. Hence, it was no surprise that active trading volume on the NFT market grew to a new peak of $8.6 billion.
However, the NFT trading volume for Q1 2022 was $19.02 billion before dropping to $11.26 billion in Q2 2022 in mid-May. The NFT market cool-off coincided with the period when the crypto market was suffering the consequences of the terra network crash and other global economic woes.
No motivation again to purchase NFTs
It is worth noting that as of April 17, 2022, the total trading volume in NFT had surpassed $54 billion in aggregate value. That amount represents a 222 percent increase from the $16.94 billion value as of January 1, 2022. Another industry survey conducted in June revealed that making money was the sole reason 64.3 percent of the polled audience bought NFTs.
Since more than 60 percent only bought NFTs to make money, the drop in NFT trading volume for Q2 2022 isn’t surprising following the crypto market contagion. There were two other reasons people purchased NFTs. 14.7 percent of the surveyed participants said they bought them to “join a community and enjoy,” while 12.4 percent said they were digital art collectors. However, 8.6 percent of this polled audience said easier accessibility to games and tools was their reason for buying NFTs.
Q2 NFT funding is down 57 percent
Q2 NFT investment was $1.168 billion and accounted for 8 percent of total Q2 investment. However, it was a 57 percent drop compared to Q1 NFT investments and funding. The report also revealed that the gaming sector received more funding than the NFT sector, with NFT marketplaces receiving the least funding from investors.
The metaverse category experienced the most noticeable change between Q1 and Q2. There is little or no ‘noise’ about metaverse investments. Data from the performance of the sandbox’s project proves this fact. Many project teams have discovered that building a virtual world isn’t an easy task. It is no wonder many metaverse-related projects remain in the concept hype stage.
Solana’s NFT market magic Eden performed better than other independent NFT financing projects from each blockchain. In late June, Magic Eden raised $130 million in series b financing, an uncommon achievement in NFT financing during a bear market period.