The consumer trading boom has deflated, pushing unicorns and recently public companies alike into defensive modes. The decline in consumer trading activity is also extending to newer categories of assets, data indicates, like non-fungible tokens (NFTs).
Per The Block’s data arm, weekly NFT sales declined by just over 70% from a high of nearly 1 million units in the third week of 2022 to a little more than a quarter-million in the most recent week in the dataset, which began in the final days of May. The decline in NFT sales volume is not new, but it has grown in severity in recent weeks, adding fresh heft to the argument that the crypto or web3 market is in a period of correction — what some describe as a “winter.”
The decline in NFT sales does not come amid a freeze in recent funding rounds for NFT-focused companies, however. A quick scan of TechCrunch headlines in fact shows the opposite. Sure, Yuga Labs of Bored Ape fame raised a $450 million round from a16z at a lofty $4 billion valuation in March, but there has been much activity since that event.
In April, Glow Labs raised $4.15 million in seed capital for its NFT-related project that wants to help “creators to deploy a smart contract with no coding required in a matter of seconds, allowing them to create customized loyalty offerings without as much hassle,” as we wrote. In early May, Americana raised $6.9 million for its plans to help “brands and creators to turn physical items such as streetwear, collectibles, cars and artwork into NFTs.”
The list of recent NFT-related deals continues. Zora Labs raised $50 million in May; its protocol, TechCrunch said at the time, “allows artists and developers to create NFT marketplaces and collections.” Less than a week later, Arianee announced that it had raised $21 million for its work assisting “digital ownership and authenticity certificates on behalf of partner brands.” And in late May, Ayoken raised $1.4 million for its creator-focused NFT marketplace.
All those funding events are predicated on the NFT market growing. TechCrunch cited data in April, for example, that the NFT market reached $41 billion in 2021, and another source said around the same time that the market could double this year. Maybe, but it doesn’t look that way:
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