Some major institutions are still betting heavily on NFTs despite the slump in value. Over the past two or so years, the cryptocurrency market has been a rollercoaster, marked by surges and slumps, with the Non-Fungible Tokens (NFTs) sector significantly affected.
NFT Market Face Challenges
The NFT market, which once witnessed a euphoric bull run in 2021 and 2022 with nearly $3 billion in monthly trading volume recorded in August 2021, saw a stark transformation in fortunes. Recent data from The Block revealed a weekly traded value of approximately $80 million in July 2023, representing a mere 3% of its peak value back in August 2021.
Notably, a recent study by crypto analysis firm dappGambl examining more than 73,000 NFT collections revealed that 95% of these collections had a market cap of zero Ether (ETH).
“Having looked into those figures, we would estimate that 95% to include over 23 million people whose investments are now worthless,” the firm wrote.
One of the key takeaways from the study was that 79% of all NFT collections remained unsold, creating a surplus of supply in the market. This surplus led to a buyer’s market, with reduced demand failing to revive enthusiasm among collectors and investors.
The NFT Spring: A Bold Prediction
Despite the challenges the NFT market faced, some experts see a glimmer of hope. On Friday, prominent crypto analyst Krypto Kaleo expressed hope that the NFT market was approaching its bottom. Drawing parallels with previous crypto trends, he predicted that 2021 and 2022 were akin to a “test pump,” similar to what the altcoin market experienced during the ICO craze of 2017.
Kaleo’s outlook suggested that after a period of consolidation and recalibration, the NFT market could see a resurgence in 2024 and 2025.
“Currently, everyone thinks NFTs are dead, and more people than not seem to believe they’re never coming back. I’m looking forward to the market once again proving them wrong,” tweeted Kaleo.
PayPal’s NFT Foray
That said, amidst the waning interest in NFTs, institutional players known for their tendency to invest when others are cautious seem to be venturing into the NFT sector. This week, PayPal filed four patent applications related to NFTs, Layer 2 (L2) solutions, and metaverse technology, joining the likes of SONY, Formula One, Fidelity Investments and Japanese electronics giant Fujitsu.
Notably, these patent filings underscore these institutions’ commitment to delve into the NFT realm, signaling a potential NFT revival ahead.
