NFT Hype Down as 1 in 3 End Up as “Dead Collection”
In the blockchain world, 2021 definitely belonged to NFTs. However, as we’re steadily pacing through 2022, it seems the hype is dying down.
Data from Google Trends shows that “NFT” searches are below “half popular” compared to “peak popularity” at the end of 2021.
Interestingly, Singapore has the highest proportion of “NFT” queries in the world, with Hong Kong, China, Taiwan and the Philippines ranking 2nd to 5th respectively.
Inspired by findings form Chainalysis that only one in five NFT minters realised profits from NFTs, Nansen dug deeper.
Analysis from the Singaporean blockchain data analytics specialists found that one in three minted NFTs have a higher trading floor price than their initial minting costs. Those looking to make a profit from minting cheap and selling high have deterred the market and ultimately killed off some NFT projects. According to Nansen, one in three NFTs ending up as a dead collection with minimal or no trade activity.
The wider downtrend in the crypto market stemming form Fed interest rate hikes and the Ukraine-Russia conflict has also added to the cold sentiment in the NFT market.
That said, depressed ETH prices have encouraged miners to mint due to cheaper gas fees. From January 2021 and February 2022, the number of minted collections soared by 4,800%.
To date, 28151.12 ETH has been spent on minting for Mutant Ape Yacht Club alone, the report noted. Nansen also cited an “increasingly competitive” market for NFT minting for the increasing volume of mints.
This again fuels the phenomenon that the appetite for NFTs is declining. Despite more minted projects, fewer are being sold on the secondary market. Since July 2021, the share of minted collections sold on the secondary market declined from over 80% to below 50%.