The consumer trade tree has deflated, pushing unicorns and recently public corporations into defensive modes as well. The decline in consumer trading activity is also extending to newer asset classes, as data indicates, such as non-fungible tokens (NFTs).
According to The Block’s data arm, weekly NFT sales fell just over 70% from a high of nearly 1 million units in the third week of 2022 to just over a quarter of a million in the most recent week in the dataset, which began in the last days of May. The decline in NFT sales volume is not new, but has increased in severity in recent weeks, giving new impetus to the argument that the crypto or web3 market is in a period of correction – what some describe as a “ winter”.
However, the decline in NFT sales does not come amid a freeze in recent funding rounds for NFT-focused firms. A quick scan of Marketingwithanoy headlines actually shows the opposite. Sure, Yuga Labs, of Bored Ape fame, raised a $450 million round of a16z at a high valuation of $4 billion in March, but there’s been a lot of activity since that event.
In April, Glow Labs raised $4.15 million in seed funding for its NFT-related project that “wants to help creators implement a smart contract without coding in seconds, enabling them to create personalized loyalty offers without too much effort,” such as we wrote In early May, Americana raised $6.9 million for its plans to “help brands and makers turn physical items such as streetwear, collectibles, cars, and artwork into NFTs.”
The list of recent NFT related deals continues. Zora Labs raised $50 million in May; the protocol, Marketingwithanoy said at the time, “allows artists and developers to create NFT marketplaces and collections.” Less than a week later, Arianee announced it had raised $21 million for its work assisting “digital certificates of ownership and authenticity on behalf of partner brands.” And in late May, Ayoken raised $1.4 million for its creator-focused NFT marketplace.
All those financing events are based on a growing NFT market. For example, Marketingwithanoy quoted data in April that the NFT market reached $41 billion in 2021, and another source said around the same time the market could double this year. Maybe, but it doesn’t look like this: