A new study shows a slump in the non-fungible token market, with low trading activity and steep price drops hinting at potential market oversaturation.
Demand and Supply Mismatch
A study finds that 98% of non-fungible token (NFT) drops in 2024 have seen no trading activity since September, with 64% having fewer than 10 mints. This limited trading, according to the State of 2024 NFT Drops report, suggests a lack of excitement or investor confidence in these projects. The findings may also indicate a mismatch between supply and demand for new NFTs.
This apparent market saturation coincides with waning user interest in NFTs and the metaverse. As reported by Bitcoin.com News, declining interest and trading activity have seen some major tech companies that jumped on the NFT and metaverse bandwagon a few years ago reporting significant losses. The report also notes that some of these companies have completely abandoned or stopped prioritizing their metaverse projects.
The State of 2024 NFT Drops report’s authors argue that the low user engagement and number of mints highlight the difficulties creators will likely face when launching new NFTs.
“Such low engagement suggests that many collections are failing to resonate with audiences, possibly due to a lack of uniqueness, utility, or perceived value. The fast-moving NFT trend may have left creators competing in an overcrowded marketplace where distinguishing themselves has become an uphill battle.”
Other alarming metrics indicate a declining market, including NFT prices falling by at least 50% in the first three days of trading. The fact that 84% of 2024 NFT drops have seen their all-time high price equal to their mint price suggests a more conservative approach by buyers. Additionally, only 0.2% of all NFT drops have generated profits for investors, highlighting the industry’s overall difficulties.
The report advises creators to address market oversaturation by focusing on community building and offering unique utility.
Read the full article here
