It’s not doing well for NFTs and cryptocurrencies.
As of September 2021, 225,000 NFTs were sold every single day. Today they are more than 19,000, according to NonFungible data shared by the Wall Street Journal. In November, Ethereum, the currency that drives much of NFT buying and smart contracts, hit a high of over $ 4,500. It is now at $ 2,800. Bitcoin reached over $ 65,000; it is now at $ 39,000.
At the same time, OpenSea, one of the largest NFT markets, has seen daily app downloads plummet 94% from a peak that reached 180,000 per day in January to around 20,000, according to Apptopia. And app installs for Veve Collectibles, another NFT market, dropped 99% from a high of nearly 18,000 per day in November 2021.
It’s not just a lack of new users either.
In-app revenue on Veve was down 90%, Apptopia says.
All of this means that cryptocurrencies and NFTs are slowing down right now. The top 50 crypto apps are down 64% in global downloads, according to data from Apptopia, and monthly active users are also down. There is a bright side, though. While the monthly active users of the top 50 crypto apps are down, they are only down by 6.5%, which suggests that those apps are keeping their users … even if they are just doing the doomscrolling by dropping the prices of the apps. cryptocurrencies and minimum bids not met on NFT portfolio items.
This would always happen.
Value in collectibles is driven by rarity, and true rarity is … rare. This is by design. But when Beeple and groups like the Bored Ape Yacht Club started raking in millions of JPEGs and GIFs, everyone and his dog piled up in the NFT market.
The result is excess: too many pieces of digital “art” chasing too few digital currencies and too few “big fools”.
None of this means that NFTs are doomed forever or that cryptocurrency is a failure. There is a scenario where, after the boom and after the crash, the digital means of owning, managing and negotiating properties become significant in the long term.
As I wrote recently after interviewing Alex Salnikov, chief product officer at Rarible (yet another NFT marketplace), digital life embodies digital ownership that requires digital currency:
Because reality is that more and more, reality is virtual. Or at least digital. We consume digital entertainment via Netflix, digital music via Spotify; we engage in digital battles on Fortnite; we win virtual wars on our smartphones; we meet others digitally through Zoom; we work digitally on laptops at home with Google Docs on virtual hard drives; we entrust our memories to search engines. Even when we train our bodies in the physical world of Meatspace, digital trainers urge us to drop them and give them 25, or push just a little harder, or stretch just a little more. In short, almost everything we do, we do digitally or powered by digital realities.
As this evolving metaverse grows around us and our reality becomes even more digital, there is a growing need to represent access rights, property rights and rights of use. What can i use? What can I allow others to use? What do I have? What do others have? Importantly, how can I express all of these things digitally, programmatically and contractually?
NFTs may still be the answer to these questions.
If so, however, we’ll have to go through this trough of disillusionment and rebuild the space based on real value, not some random algorithm-generated art that Tech Dude # 3 hopes will fund his tropical retreat.