So far, 2024 has not been overall a great year for the NFT market, but in recent weeks we are witnessing a comeback in prices.

The best collections like BAYC, Crypto Punks, and Pudgy Penguins are experiencing an increase in both their respective floor price and total sales volumes.

Is it a signal of a restart for the NFT sector? Let’s delve deeper below.

The negative performance of the top NFT collections in 2024

Although in recent weeks we are about to talk about a price recovery, we must point out that throughout 2024 the NFT market has been in constant decline.

Since the burst of the bolla in 2022, after the value of the cryptographic JPEG industry reached 417 billion dollars, this market has not recovered.

Both the market capitalization and the sales volumes have gone through a long bear market up to the present day.

Since January 2024, there has been an acceleration of the bear trend, according to the data from Coinmarketcap in the section “Highest Price NFT Stats” (data up to July 2024).

In particular the capitalization of NFTs has decreased by approximately 48% going from 51.7 billion at the beginning of the year to the current 26.8  billion dollars.
Sales have literally plummeted in the same period going from 3.7 billion to 819 million dollars.

Source: https://en.cryptonomist.ch/categoria/nft/

The depression of 2024 mainly affected the major NFT collections on the market, such as the famous “Crypto Punks”, born in 2017 from the invention of Larva Labs.

Based on the data reported by the site “NFTPriceFloor,” these collectible pieces have almost halved their price (denominated in ETH) since January.

Their floor price has dropped from 52.9 ETH to the current 28.5 ETH, while the value in dollars has fallen from 128,000 dollars to approximately 70,000 dollars.

Think that at the height of their splendor, the Crypto Punks had reached a valuation per token of over 110 ETH.

Source: https://nftpricefloor.com/it/cryptopunks

The recent rally in NFT market prices

If we shorten the time horizons by focusing only on the last few weeks of trading, we notice that there is a price recovery in the NFT market

Starting from the Crypto Punks, which boast the primacy in the capitalization of the sector, we see a strong increase in quotations from August 20 onwards.

The floor price of the collection in just 8 days has increased by over 20%, going from 22.8 ETH to 28.5 ETH. Some sales in these days have even exceeded the price of 30 ETH.

This is a signal of strong return of interest for a market that has been completely abandoned in recent years.

The international tensions and the uncertainties on the macroeconomic front have not favored the emergence of this speculative asset class, but now the time for the comeback has arrived.

Source: https://nftpricefloor.com/it/cryptopunks

Not only for the Crypto Punks, the increase in prices in the NFT market has also affected other collections.

As reported by the marketplace Blur, almost all the top collections (some more, some less) have seen an increase in the floor price in the last 7 days.

Pudgy Penguins increased by 14.78% bringing the selling price to 10.79 ETH, while Bored Ape Yacht Club rose only by 2.18% to 13.09 ETH.

Excellent numbers for Azuki, which despite losing appeal, records an increase of 7.2% in price, rising to 4.91 ETH.

Mutan Ape, Lul Pudgys, Baby Bears e Doodle also offer positive performance despite the slight decline on the last trading day.

Only Milady is bucking the trend, marking a drop of 7.26% in 7 days: however, the collection has grown throughout 2024 contrary to the rest of the market, doubling its value in 8 months.

Source: https://blur.io/

Sales volumes on the rise in August

The recovery of NFT market prices that we are witnessing in recent days is accompanied in parallel by an increase in sales volumes.

Within decentralized platforms like Blur, OpenSea, Magic Eden and Element Market, trades have intensified rapidly.

As reported by the site “CryptoSlam”, almost all the top collections have had an increased sales volume in 30 days,

To highlight in particular the great success of Crypto Punks, Guild of Guardians, and DeGods, which during the period recorded a boost in sales of 134%, 185%, and 259% respectively.

The recovery of the NFT market is also visible on Sorare, coinciding with the start of the 2024/2025 football season, and on the famous BAYC managed by Yuga Labs.

Numbers still negative instead for the DogeZuki and Solana Monkey Business collections, as well as for NodeMonkes.

Source: https://www.cryptoslam.io/

Overall, the global sales volume of the NFT market has grown by 14% in 7 days, reaching 100 million dollars.

In total, there have been over 1.8 million on-chain transactions in this context, with an average of 55 dollars per sale.

The buyers were significantly more than the sellers, with 546,000 users who bought from another 257,000 individuals.

The blockchains of Ethereum, Solana and Bitcoin are the most chosen by users to trade NFTs with over 60% of the market share of volumes.

The hope for NFT traders is that the recovery of the last week can trigger a prolonged rally in market prices, and that it does not fade from here on out.

The NFT market is still in deep crisis, with prices far from those of the boom. 

Although July is not over yet, only two days are left, so the first conclusions can already be drawn. 

The collapse of volumes and prices in the NFT market

The boom of the NFT market occurred during 2021, with the peaks reached in January 2022. 

According to the data from CryptoSlam, in January 2021 the total monthly trading volumes of NFTs on the market surpassed 100 million dollars for the first time.

A year later, in January 2022, they had risen to over six billion dollars, or sixty times as much. 

After this amazing growth, which lasted a year, a very long bear-market followed, which is still ongoing. 

The minimum peak of monthly trading volumes in 2022 in the NFT market was recorded in October, with less than 600 million dollars, which is a drop of more than 90% in less than a year.

However, 2023 went even worse, with a drop to 300 million dollars in September. 

At the end of 2023, it seemed, however, that it was recovering, with a rise above 1.7 billion dollars in December, but at that point, a new decline began that brought the monthly volumes back around 400 million. 

Therefore, although the worst post-bubble month for now remains September 2023, the approximately 400 million dollars this July are significantly lower than the worst month of 2022. 

The end of 2023 turned out to be just a flash in the pan. 

Buyers and sellers

Crypto Slam also measures how many active public addresses are on the NFT exchange market. 

In January 2021, there were very few, so much so that those data must now be considered absolutely outdated. 

In April 2021, however, there were just under 500,000 active addresses both in buying and selling. 

At the peak, in January 2022, the active addresses of sellers had risen above one million, while those of buyers had approached one and a half million. These, despite being all-time highs, still do not seem particularly significant numbers. It means that even during the last major bubble this was still just a niche market. 

Also in this case, the post-bubble minimum peak was reached at the end of 2023, with fewer than 500,000 sellers in November, and fewer than 540,000 buyers in October. 

In this case, however, the rebound in 2024 occurred, and it seems to be holding. 

In February of this year, the sellers rose above 800,000, with the buyers rising to over 1.2 million. The even more curious thing, however, is that in July, for now, there have been only just under 370,000 active addresses of the sellers, while those of the buyers have remained just under 980,000.

The current prices of the NFT market

Despite the sharp drop in sellers, and the relative stability in the number of buyers, prices have returned to being low. 

The point is that, probably, retail sales have decreased, but those of the original producers have remained high. 

The buyers have decreased much less from the annual peak in February, but they have still decreased. And that’s why the volumes have remained low, despite the high number of buyers. 

While on one hand such a picture does not seem to be comforting at all, on the other hand, the resilience of the number of buyers suggests that there might eventually be room for a new rebound. 

It is worth noting that during the second quarter of 2024, ending in June, volumes decreased by 45% compared to the first quarter of the year, dropping from 4.1 billion dollars to 2.24 billion.

At the beginning, to tell the truth, there was a significant increase, particularly in the number of transactions, which rose from 5.7 million in June to 9.9 million transactions. This further certifies that the average price has dropped. 

The future of the NFT market

Despite everything, the NFT market still seems to have a future. 

In a recent interview, the founder of CryptoSlam, Randy Wasinger, stated that NFTs are not dead, and that, just like all digital assets on blockchain, they are here to stay.

The key point at this stage is the rotation between different sectors.

Wasinger in fact believes that some applications of NFTs, fueled by previous cycles of hype, might indeed never return, but other use cases could reach new peaks and bring this market back to previous levels.

One of the use cases that might disappear are the picture-for-profile (PFP), which might never again regain the level of adoption they had a year or two ago.

Instead, other use cases, such as those within Web3 apps, could continue to evolve positively. 

Wasinger said: 

“I don’t know if this will necessarily be reflected in large sales volume numbers like in the past, at least in the short term, but I foresee that it will manifest in perhaps greater transaction volumes”.

It seems that there may be an inverse correlation between the memecoin market and that of NFTs, with the prices of these two types of assets moving in opposite directions. 

In particular, the memecoin market could at this moment be the cause of the strong suffering of the NFT market. 

The drop in NFT prices: is it the fault of the memecoin market?

Comparing the trend of the last few months of the memecoin market with that of NFTs, there actually seems to be an apparent inverse correlation. 

Using the chart of monthly NFT sales volumes from CryptoSlam, it is noted that starting from June 2022 there has been a real collapse.

Since then, the lowest point was recorded in September 2023, with only 300 million dollars in monthly trades.

In particular, after a brief and contained peak in December 2023, during 2024 the daily trading volumes of NFT remained above 25 million until April, then plummeted between May and June to just over 10 million.

In fact, the monthly trading volume for the recently concluded June was only 462 million dollars, which is much less than the 1.7 billion of December 2023.

In other terms, the monthly volumes over the course of the year went from 1.7 billion dollars in December 2023 to 462 million in June 2024, with an almost constant decline of 74%, concentrated mainly in the last two months. 

The memecoin market pushes NFT prices down

Many memecoin instead in 2024 have performed well.

Taking as a reference the gains or losses from December 31, 2023, for example, Dogecoin is at +40%, Shiba Inu at +66%, Pepe even at +725%, and Floki at +363%. 

Even the new WIF (dogwifhat) has recorded a sensational +1.300%, while Bonk stops at +77%.

These numbers as a whole seem to indicate a possible capital flight from the NFT market to that of memecoins. 

However, if only the last 30 days are taken into consideration, the inverse correlation does not seem to be there. 

The market prices of all six major memecoins in June lost between 21% and 35%, with overall movements decidedly similar to each other. 

The monthly trading volumes on the NFT market in June decreased by 25% compared to those in May, which is a decline of the same order of magnitude as the prices of memecoin. 

Prices and volumes

However, one should not compare prices with volumes, because they are two different things. 

However, it is possible that a decrease in NFT sales volumes corresponds to a decrease in prices, given that volumes are calculated by multiplying prices by quantities. 

So if on one hand there doesn’t seem to be a direct correlation, the circulating hypothesis is that in the second quarter of the current year, taken as a whole, a wave of new memecoins on VIP, politics, and animals may have diverted capital from the NFT market, and the decline of the crypto market did the rest. 

It is worth noting that the overall volumes of the NFT market in June were even lower than the lowest monthly peak of 2022, the year of the bear-market, and this suggests that there might be a sort of delay between this market and that of the memecoins. 

On the other hand, for example, the historical peak of the monthly trading volume of NFTs was recorded in January 2022, a good two months after that of the crypto market. 

The hypothesis of the co-founder of Animoca Brands

In a recent interview the Co-Founder and Executive Chairman of Animoca Brands, Yat Siu, stated that he believes the NFT market could recover. 

He stated that a new speculative bubble should not be necessary to see this market recover, because NFTs can also be used in games, for intellectual property rights, and for many other things, and this could generate demand. 

From his words, however, it is clear that the boom in the NFT market has already occurred, and there do not seem to be the conditions for a new true and proper boom in the short term. 

On the other hand, however, he considers it illogical that the monthly trading volumes are so low, blaming it mainly on the summer period. In fact, he believes that when market activity resumes, more volumes, trades, and activity will be seen. 

This hypothesis could also explain why even the main memecoins performed poorly in June. 

The recovery of the market

A recovery of the memecoin market, after the general decline in June, is expected by many. 

It is not certain that the usual memecoins will always perform well, as new ones are constantly being created that sometimes manage to make a splash and attract capital that does not flow towards other memecoins. 

It is also possible that during periods when memecoins – especially new ones – attract a lot of capital, this is also drained from the NFT market, and it is possible that summer is not a particularly brilliant period for financial markets as a whole. 

For example, even in June 2021 there was a drop in the monthly volumes of NFTs, but in July there was the first big boom. June 2022 was a bloodbath, but there had been the implosion of the Terra/Luna ecosystem. In 2023 the drop lasted for a full eight consecutive months, from March to October. 

All this makes it possible to imagine that sooner or later this market may recover, even if perhaps, as Yat Siu says, we will have to wait for a broader and more massive use of NFT technology even beyond the art market.