Crypto Market Downturn and Memecoin Flood Drive 44% Plunge in NFT Sales in Q2, Future Resurgence Eyed
Summary:
The influx of celebrity, political, and animal-themed memecoins, coupled with a slump in the crypto market, has reportedly led to a 44% drop in non-fungible token (NFT) sales in Q2, according to Apollo Crypto's investment leader. Despite this downturn, however, memecoins continue to experience high trading volumes. Future developments in Bitcoin-based Ordinals could further shift attention away from traditional NFTs. The end of 2023 witnessed a slight recovery in the NFT market, stimulating hope for a resurgence in 2024.
The surge of celebrity, political, and animal-themed memecoins, accompanied by a slump in the cryptocurrency market, may have resulted in a 44% downward plunge in non-fungible token (NFT) sales in the second quarter, according to Apollo Crypto's investment leader. CryptoSlam's data indicates a decline in NFT sales from $4.14 billion in Q1 to $2.32 billion in Q2, mirroring the larger market fall. Apollo Crypto's Chief Investment Officer, Henrik Andersson, commented to Cointelegraph, citing a challenging Q2 market with a 15% dip in Bitcoin and even sharper falls in many altcoins.
Andersson also suggests that memecoins could be diverting attention away from NFTs. 'Mind share,' a concept in marketing denoting consumer consciousness or acceptance of a certain product or thought, is possibly being siphoned off by these memecoins. Despite the slowdown in NFT selling, memecoins' trading volumes remain high, reaching $3.4 billion in the past day according to CoinGecko. Notably, a surge in political-themed memecoins linked to the US Presidential race and a spate of new celebrity tokens on Ethereum and Solana have been observed.
Future developments in Bitcoin-based Ordinals could further divert attention from traditional NFTs, notes Andersson. He expects Bitcoin ordinals to increasingly capture the NFT market share, especially with the upcoming introduction of numerous Bitcoin L2s. However, a downturn in activity has also been noted on Ordinals and Runes in recent weeks.
In Q4 of 2023, NFTs experienced a small rebound, posting over $3 billion in sales and offering a glimmer of hope for a recovery in 2024. This revival included a record-setting sales month in December 2023, the highest since the NFT market started to wane in June 2022. Top NFT collectibles such as CryptoPunks and Bored Ape Yacht Clubs continue to command large market caps of $994.9 million and $345.9 million, respectively. However, the two leading Ordinals projects, NodeMonkes and Bitcoin Puppets, report significantly smaller market caps of $121.1 million and $94.2 million.
Published At
7/1/2024 8:04:57 AM
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