“Collapsing,” “flatlining,” “falling fast”—these are the words being used to describe the NFT market in the last couple of months, during which sales have dwindled from previous highs.
Total trading volume in May is projected to be $5 billion, compared to $17 billion in January and $12.4 billion in February, according to data from Dune Analytics. These shrinking sales come amid a greater crash in crypto that has shed nearly $1 trillion in market value over the past month.
Brands with NFT strategies are already feeling the squeeze of the downturn. The floor price for Bud Light Next’s NFTs is $38, down from the original price of $399. The floor price for Under Armour’s Genesis Curry Flow NFTs is $90, down from an original price of $333.
The decline is also impacting NFTs that represent virtual land, which have previously been a hot acquisition for brands looking to build experiences in the developing metaverse. The current floor price for a plot of land on The Sandbox, for example, is roughly $3,300, per CoinGecko. Only a few months ago, this price was between $9,500 and $11,000.
Read more: Why brands are buying land in the metaverse
While experts told Ad Age that reports proclaiming the death of NFTs are overblown—indeed, these have received substantial criticism online—they concur that brands must be prepared for what is emerging as a major inflection point in the NFT space.
“The market right now is incredibly choppy and volatile, but I actually think this is the biggest opportunity for brands and progressive agencies to be hunkering down and building for the next [internet],” said Michael Litman, senior director of Web3 and NFT at Media.Monks.