NFT sales have fallen to a 12-month low

The crypto market for NFT assets has been affected by the crypto winter, resulting in a crash in the sale of NFTs.

Despite the rise of NFTs over the past two years, this digital asset class has not been far from the recent cryptocurrency market crash.

The exponential growth of NFTs boosted them by 21,000% between 2020 and 2021, leading them to reach a capitalization of $17 billion. However, sales of NFT assets totaled just over $1 billion in June, according to research firm Chainalysis, their worst performance from the same month last year, when sales were roughly $648 million.

Notably, NFT sales reached a monthly record of $12.6 billion in January of the current year.

According to Chainalysis analyst Ethan McMahon, the recent NFT market decline is strongly tied to the recent cryptocurrency crash.

“Times like these inevitably lead to consolidation within affected markets, and for NFTs, we will likely see a push back in terms of collections and types of NFTs that will find success.” McMahon expressed.

Additionally, McMahon added that it will also be "interesting to see the type of NFT assets that will come to the fore" during this downturn period.

As of November 2021, cryptocurrencies had a market capitalization of $3 trillion. However, currently the crypto market capitalization is less than $1 trillion, a drop of more than 70% in less than a year.
NFTs have not been exempt from the crypto winter

NFT assets rely on the Blockchain to which they are linked to convey information about who owns them. And in turn, the same Blockchain technology is responsible for its negotiation, it should be noted that an important part of the existing NFTs are hosted on the Ethereum Blockchain, which runs under the Proof of Work protocol.

At one point in its heyday, the NFT market attracted large sums from investors. For example, the first tweet published by the founder of Twitter, Jack Dorsey, was auctioned for approximately $2.9 million dollars.

On the other hand, the artist Beeple sold one of the virtual collages of him for more than $69 million dollars.

In November 2011, the “AXS” token from the video game NFT, Axie Infinity, reached $9.8 billion in market capitalization. Also, soft drink giant Coca-Cola raised more than $575,000 with the launch of its NFT collection of digital custom jackets and other digital items for use within the Metaverse.

According to the Chainalysis report, NFT assets peaked in January, but have been in a tailspin ever since. An example of this was the attempt to resell the NFT from Dorsey's tweet in April, whose offers only reached $250.

Also, the popular NFT ape collection, "Bored Ape Yacht Club", has drastically decreased its market value.

Currently, the average price per unit of each NFT in the Bored Ape collection is 89 ETH. By comparison, in April the NFT Bored Ape Yacht Club collection was trading at an average price of 150 ETH per unit.
Unknowns grow about the future of the crypto market

Currently, the cryptocurrency market is under intense pressure. Rising inflation and rising interest rates by central banks have dampened the appetite of the crypto market.

According to experts, in recent months investors have not been motivated to acquire this class of "risky assets", as with technology stocks.

Notably, the cryptocurrency crash was fueled by the collapse of the Terra ecosystem. Because its stablecoin “TerraUST” was pegged to the US dollar, but lost its peg spiraling down and wiping out more than $40 billion from the crypto market.

In addition to this, the recent problem due to the default of payment by the major cryptocurrency lender Celsius Network, has also affected, further weakening cryptocurrencies and NFTs.

Right now, Bitcoin (BTC) and Ethereum (ETH) are trading at $19,286.01 and $1,065.03, respectively, according to data from CoinMarketCap.