NFT Market Down 92% From January 2022 Peaks: Best Time To Invest?

NFTs dominated headlines from late 2020 throughout 2021 before peaking in early 2022. By November 2020, the global NFT sales volume was around $8 million.

Non-fungible tokens (NFTs) have seen a massive decline in sales volume over the past two years, according to data from CryptoSlam.

While sales peaked at over $6 billion in early 2022, they had fallen to around $100 million by early October. This decline coincides with a broader downturn in the cryptocurrency market.

However, one analyst on X believes that this downturn could present an optimal opportunity to invest in NFTs.

With prices down 92% from January 2022 peaks and back to late 2020 levels, the analyst argues that the decision to buy now could be the “ultimate contrarian” move and might turn out to be the “right bet.”

Yet, attempting to time the “perfect” bottom and loading up on NFTs now carries inherent risks.

As per CryptoSlam, the number of unique buyers and sellers is also declining. Despite prices recovering from September 2023 to early Q1 2024, interest seems to be waning.

Sales fell to $296 million in September, down from $373 million in August. It also marks a nearly 70% crash from the $1.7 billion recorded in December. If crypto prices continue to decline, sales will likely suffer.

Impact Of Crypto Prices And Regulations

CryptoSlam data shows that Ethereum leads in NFT activity, with over $44 billion of NFTs traded on the network, compared to $5.8 billion on Solana and just $1 billion on Flow.

Hence, if ETH prices were to drop below $2,100 and August lows, the likelihood of NFT activity on the platform shrinking would be high.

Apart from prices, the NFT industry is facing increased regulatory scrutiny, particularly from the United States SEC. In late August, OpenSea reportedly received a Wells notice, indicating the regulator's intent to sue.

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