Is the NFT Marketplace failing after a decade of success?

Is the NFT Marketplace failing after a decade of success?

Time Stamp: October 6, 2023 12:00 AM
  • Africa’s NFT market had a total revenue of $3420.4 million, according to Research and Markets.
  • The global sales of NFT in 2020 were at least $18 million, while in 2023, it’s $ 5 billion.
  • In 2020, total trade profits reached $400,000, while in 2023, a loss of $275 million was experienced.

2023 has been a daring year for the entire web3 industry. After the 2022 crypto crash, many individuals thought that was the end of the crypto industry. Despite the market surviving, the rise that followed did not make things easier. The entire crypto industry lost tens of millions, causing many to sell their digital assets. As a result, the whole market almost vanished in months. A hail storm of crypto lawsuits followed, which has become a pursuit of control.

Unfortunately, the crypto winter affected more than just digital assets; the NFT marketplace has recently experienced a significant drop in value. Despite introducing digital ownership, the NFT market has suffered tremendously from the collapse of its sibling sector, cryptocurrency. This generally begs the question: will the NFT market be the sacrificial lamb to save the entire web3 ecosystem?

The calm before the fall of the NFT Marketplace

The entire web3 falls under four categories: Artificial Intelligence, cryptocurrency, NFT, and the Metaverse. Despite each contributing significantly to its primary goal of replacing the Internet, NFTs have contributed significantly to shaping our perception of technology. NFT art has risen in fame for the past few years and become the second feat of the entire web3 industry.

Initially, NFT was merely thought of as a way to digitize art. This trend gained much fame and soon became an entirely separate industry similar to the crypto industry. The underlying blockchain technology of most NFT marketplaces opened more opportunities for artists. This rise to glory led to the creation of Africa’s NFT market, which had a total revenue of $3420.4 million, according to Research and Markets. Countries like Nigeria, Ghana, South Africa, and Kenya have stood at the forefront of Africa’s NFT market, producing well-known artists.

NFTs’ main selling point is its ability to support digital ownership, a feat that redefined how we own digital assets. This single property expanded into multiple domains. Soon, digital content creators. Singers and artists turned to NFT to fully hold their content. Furthermore, its ability to simplify supply chain management in the media industry caused many changes in several years. Today, the Web3 Music platform is a rising concept. Artists can earn fully from their albums, digital content, and artwork. In addition, several longstanding media platforms like Spotify announced their intent to integrate web3 music. 

The uses of NFT soon expanded into other industries, like the gaming industry. Recently, various gaming platforms utilized NFT to introduce new characters of Merchandise. Memecoins like Tamadoge and DogeCoin soon used this opportunity, developed several blockchains, and collaborated with other corporations willing to transition. Furthermore, NFT has led to the development of identification systems.

Africa’s NFT market comprises several organizations, each utilizing NFT in its own way. Their prosperity and innovative solutions inspired several governments to test new identification systems based on NFT. Sierra Leone was among the first to try this new technology on their voting systems. Digital ownership allows a user to win a specific vote, mitigating fraudulent activity during the counting process.

In April 2022, Emirates Airlines announced its entry into the Metaverse and NFT sector. According to its announcements, the firm brought a series of digital collectibles to enhance the flyers’s metaverse experiences. The MENA region has played a significant role in expanding Africa’s NFT market, but unfortunately, things took a turn for the worse in 2023.

Is the NFT marketplace crashing?

Despite the rapid adoption rate of NFT, its value suddenly hit a major block when the crypto winter set in. With the value of the currency used by most NFT marketplaces dropping, many art pieces had to skyrocket. In addition, the increased distrust of web3-based platforms significantly reduced the number of clients. According to the crypto gambling site dappGambl, the situation has only worsened with time.

NFT-Prices

OpenSea monthly revenue in 2022 depicts how NFT suddenly crashed in 2022.[Photo/REUTERS]

They stated that many collections containing blockchain-based tokens now have a market capitalization of nearly zero. The platform includes an NFT section, and out of 73,257 NFT collections ranging from images to GIFs, many were deemed worthless. Its report said, “This statistic effectively means that 95% of people holding NFT collections are currently holding onto worthless investments. Having looked into those figures, we would estimate that 95% include over 23 million people whose investments are now worthless.”

Also, Read How the African NFT market is surviving the crypto crash.

Unfortunately, despite Africa’s NFT market still circulating a substantial amount, the crypto winter significantly damaged the entire industry. Their difference is tenfold when measuring the value of NFTs from its peak to its value today. According to researchers, unique buyers and collectors have significantly increased by 10,100%.

This has affected the demand rate. The global sales of NFT in 2020 were at least $18 million, while in 2023, it’s $ 5 billion. Unfortunately, due to the increased number of buyers with the reduced value of cryptocurrency, trade profits have significantly dwindled. In 2020, total trade profits reached $400,000, while in 2023, a loss of $275 million was experienced.

In recent months, NFT sales have plummeted every week. This figure has rocked the foundations of Africa’s NFT market, causing many to withdraw from the activity.

Wrapping Up

Unfortunately, the figures do not lie, and the NFT Marketplace will eventually shut down. Despite providing digital ownership, NFT artwork has significantly flooded. Many sellers and NFT artists often wait for the highest bidder, but with the franchise flooded, it’s only a matter of time before the entire industry drowns.

Despite this tragic expectation, only Maret Laces will suffer significantly. NFT as a concept has solidified its place in the Fourth Industrial Revolution. It serves as the backbone of several technological advancements like the Metaverse. In addition, it severed its purpose by providing digital ownership to all its users. Africa’s NFT market may continue to suffer, but innovators have found new ways to utilize NFT functionality.

Also, the Read NFT industry struggles to stay afloat amid the crypto crash.

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