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The Fading Buzz of NFTs in Nigeria and the Global Market
Global sales of Non-Fungible Tokens (NFTs) dropped 47% in Q1 2022 compared with the previous quarter, according to NonFungible, a company that analyses the NFT industry. Data from Chainanalysis suggested the market dropped from $3tn in November 2021 to less than $1tn today. Sales in Nigeria plunged 98% to $15m in April 2022. Causes for the drop include the fact that there isn’t as much new material being released as the first wave of NFTs, volatility in the lack of regulation made investors less inclined to buy and some buyers had negative experiences with theft and fraud.
“The NFT Market Takes a Hit: Global Sales Plummet by 47% in Q1 2022
The Nigerian art industry experienced a surge in popularity in 2021 due to the rise of NFTs, which allowed artists to capitalize on the transition of the art world to the digital realm and enhance their net worth. Ethereum trading volume on OpenSea reached over $2 billion in January, and in August 2021, OpenSea set a new record of over $3.4 billion. However, recent data from NonFungible suggests that global NFT sales decreased by 47% in the first three months of 2022 compared to the prior quarter, with sales falling to $1 billion in June 2022, which was a 12-month low and the market’s lowest performance since June 2021. The market’s value has also decreased from $3 trillion in November 2021 to less than $1 trillion today, according to Chainanalysis. Causes for the decline in NFT art sales include the lack of fresh releases, declining crypto prices, and a decline in interest from investors due to the volatility and lack of regulation surrounding NFTs. The recent bitcoin crisis could also be a factor in the declining interest in NFTs, as consumers frequently purchase NFTs using bitcoin, ethereum, or other digital currencies. Additionally, a rash of thefts and frauds on important NFT marketplaces is also dwindling interest in NFTs. Overall, the NFT market’s current narrative suggests that the buzz around NFTs in Nigeria and the rest of the world is fading.
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Everyone yelled “NFT” in 2021. Through NFTs, Nigerian artists were taking advantage of the transition of the art world to the digital realm. While they were at it, they enhanced their net worth despite a government crackdown on cryptocurrencies.
One of Nigeria’s most successful digital artists at the time, Osinachi, remarked that he could charge up to five figures for his NFT creations. The possibility of posting his art somewhere other than Instagram, where more people would see it, excited him, he added.
“I went in and looked around the markets, and the markets didn’t pick up, and we didn’t see the boom until 2019,” he continued. “The pandemic was helpful since it prevented collectors from visiting physical galleries, so a lot of them discovered the NFT space. And then, from 2020 to 2021, the Christie’s auction happened, and everybody was screaming NFTs.
Using the new technology, celebrities, sports teams, artists, and major businesses promoted digital copies of their products.
Ethereum trading volume on OpenSea reached $2.29 billion in January. In August of last year, OpenSea set a new monthly record of just over $3.4 billion.
The NFT market not only maintained its momentum when cryptocurrency prices fell off a cliff in May and were far off-peak throughout the summer, but it also ascended to maybe greater heights in Nigeria and abroad.
But recent data suggests the buzz around NFTs is starting to fade.
The Current Narrative
According to NonFungible, a company that studies the NFT industry, global NFT sales decreased 47% in the first three months of 2022 compared to the prior quarter.
NFTs appear to be losing favor with the public. Sales fell to $1 billion in June 2022, which was a 12-month low and the market’s lowest performance since June 2021 (when sales were at $648 million).
According to data from Chainanalysis, the market’s value has decreased from $3 trillion in November 2021 to less than $1 trillion today.
