Cryptocurrency News

NFT Global Sales Volume Decline By Half: Is It A Worrying Signal?

NFTs are a form of crypto asset, which cannot be replicated or duplicated. It can be a digital record of an image, video or audio file, or text.

Over the past two years, the rise of cryptocurrency and blockchain technology opened multiple avenues for investors, who raced to make the most of the profit the new industry was seeking to offer. 

The NFT Marketplace was one such avenue where investors and creators flocked in large numbers, pushing the sector to incredible heights in a very short time. 

However, the NFT business appears to be losing steam or at least undergoing correction. This has forced many blue-chip NFT holders, those believed to have invested in safer digital assets, to look for other opportunities and alternatives to using their holdings.

According to the NFT data aggregator, CryptoSlam, the NFT global sales volume had hit $4.6 billion in January. But it declined by almost half to $2.4 billion by the end of March. Several NFT owners have decided to sell their digital items amid this crunch. However, not all have lost faith in the sector. Some still feel strongly supportive of NFT, and they are holding on to their investment – such as Bored Ape Yacht Club, which rose 199.6 per cent, the CyptoSlam data showed.

This suggests that there has been an increase in NFT lending. NFT owners appear to want to use their digital items to have liquidity. Domain experts say they may want to invest that money elsewhere by purchasing other assets. They also said that adding is the natural course with every asset.

Lending NFTs to get liquidity and maximize capital efficiency is natural. For instance, Arcade NFT specializes in giving owners the ability to obtain loans by pledging their digital collectables as collateral instead of providing some other asset like a house or car.

Experts say the decline in sales volume of NFTs is likely because people are now becoming aware of what they can do with their NFTs or non-fungible tokens. But that is uncertain as several NFTs bought at unbelievably high prices during the market boom are struggling to resell.

NFTs are a form of digital asset that cannot be replicated or duplicated. It can be a digital record of an image, video or audio file, or text.

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