Data from Google Trends shows that interest in non-fungible tokens (NFTs) among Internet users worldwide has fallen to October 2021 levels – far from what was at the peak of excitement in early 2022.
According to Google data, search interest in “NFT” and other related terms has been steadily declining since January.
We visualized the statistics using the trends for the search terms “Buy NFT” and “Sell NFT”. The number of searches for the first term reached 12 out of 100 in the week of May 29-4. June 2022, which is a decrease of 88% from the top in the week 16.-22. May. January 2022 means. On the same scale, the second period saw a 86% drop in search interest, from 52 points in early 2022 to a score of 7 points between mid-January and early June.
The last time searches for NFTs were so low was in the week 3-9. October 2021, just before the Bitcoin price hit its record high level, and cryptocurrencies and NFTs were constantly in the headlines. In 2021, the number of traded NFTs also rose sharply, peaking towards the end of the year.
However, interest in buying NFTs has steadily declined since the beginning of 2022, indicating a consolidation period for this digital asset class.
According to a report by DappRadar, the NFT market achieved a trading volume of $ 3.7 billion in May 2022, a 20% month-on-month decline.
But the situation is not as gloomy as it immediately seems. An analysis of trading volumes in different NFT marketplaces shows many green figures, for example, Solana NFT has defied the current trend and registered a growth of 13% in the same period.
Certain NFT categories, such as arts and entertainment, have also counteracted the trend and have seen an increase in interest since mid-May 2022.
Investors are concerned about the risk of fraud
According to Raj Kapoor, chief adviser to the crypto company Acryptoverse, the death of famous digital artist Qing Hanim in 2020 triggered a wave of scams when dishonest NFT traders took advantage of the moment to sell digital works of art as NFTs in Hanim’s name.
In another incident last year, graffiti artist Banksy’s website was hacked, and an ad was placed for the sale of his alleged first NFT, prompting a collector to pay the hackers $ 336,000.
According to experts, there has been an increase in fake profiles in the NFT marketplaces lately. Also, fraud continues to flourish on Discord, with investors falling victim to phishing, pump-and-dump and other scams.
The combination of these factors makes investors nervous. This has resulted in the NFT market being flooded with supply exceeding current demand. As a result, prices for NFTs from popular collections such as CryptoPunks and Bored Ape Yacht Club have dropped significantly from their heights.
Market participants move money to safe investments
According to Aliasgar Merchant, developer relationship engineer at Ignite, the current bear market for cryptocurrencies and stocks has led people to move their money from risky assets like NFTs to safer assets.
“People are losing confidence in cryptocurrencies in general. The recent Terra crisis has shown how people can lose money in just a few days. But given the volatility of NFTs, people are extra cautious. In the long run, one should focus on projects at “Who you really are comfortable with and know. Following the trend and investing in an NFT just because everyone does it will do more harm than good in the long run,” says Merchant.
Despite the challenges facing the NFT industry and the bleak macroeconomic prospects, new use cases are being unlocked by companies focusing on NFT through constant innovation.
As Metaverse expands its horizons and more Internet users explore this alternative reality, there is a wave of NFT trading platforms that act as “fygital” marketplaces, facilitating the convergence of the real and digital worlds.
Because NFTs offer ample opportunities for both collectors and artists, they play a key role, along with cryptocurrencies, in building the economic foundation of Metaverse, potentially leading to the creation of a parallel digital economy where all people can act in a decentralized manner.
Current phase is good for NFT buyers
The founder of the NFT marketplace Yunometa Arijit Mukherjee believes that the collapse of the NFT markets can be a blessing: “With rising inflation and uncertainty in the money markets, we are clearly in a phase of consolidation.”
“Parallels can also be drawn with various cryptocurrencies and coins traded at levels significantly below their record high levels. For those waiting to build a significant NFT collection, this can be a blessing as the conditions for buyers never have been so good, “he says.
He adds that things may be looking bleak for content creators and digital artists right now as buyers rein in their spending.
“However, there is no doubt that NFTs will continue to be stronger and better over the coming months. One can take as a guideline the growing number of celebrities and athletes who are in the process of launching their bespoke NFTs. “collections or this has already been done. Both buyers and sellers would do well to do their own research and make the most of this lucrative buying opportunity,” says Mukherjee.