In the last week of May, average daily NFT sales were $33m, compared to more than $150m in the same period in April. Overall, sales have rolled back to mid-2021 levels.
The correction in the cryptocurrency market has not spared the NFT sector, which many participants see as an investment opportunity. When new collections from established brands come out, they are actively buying tokens with the expectation of future resale.
This was evident in early May with the release of the NFT collection from Yuga Labs, responsible for the popular Bored Ape Yacht Club (BAYC). BAYC ranks sixth overall in the NFT standings with $2 billion in sales, and one of the monkeys was bought for 250 ETH ($450,000) on May 10.
The new collection from Yuga Labs features tokens representing plots of land in the Otherside meta universe. The first 55k plots were sold out in a few hours.
Due to Ethereum’s low bandwidth, buyers were tipping off miners to get their transaction processed as quickly as possible in the rush. As a result, miners earned a record $231 million in 24 hours, as the commission at the peak exceeded $1k.
However, this surge did not lead to meaningful results for the NFT market, which has shrunk by 65% in the last 30 days. Ethereum was also not positively affected, as the subsequent collapse of Terra (LUNA) and investor flight from DeFi hit the altcoin’s capitalisation.
Search engines are also recording a drop in interest in NFT. Thus, the query “NFT” in Google Trends dropped from a maximum of 100 points in mid-January to the current 22 points. The decline in interest in this area leads to Ethereum’s natural weakness against Bitcoin, as support for smart contracts is the trump card that significantly differentiates the altcoin.