NFT market moves sideways in 2024 with 50% drop

The NFT market has continued its downturn in 2024 with the CryptoSlam 500 NFT Index dropping over 50%. Reduced demand and lower trading volumes have added to the decline on Ethereum, Solana, Polygon, and Cardano.

A few collections on Blast have managed brief surges. So, why is the overall NFT market moving sideways?

NFT market index falls by 50% in 2024

The global NFT market has dropped by over 50% in 2024. The CryptoSlam 500 NFT Index, which acts as a market proxy, had a YTD decline of almost 1,300 points at press time. 

The index shows a steady decline this year due to reduced demand, lower trading volumes, and shifts in investor interest. The high for the period was above the 2,400 level, and the low is close to 1,160. The current market value is at a year’s low as NFTs have struggled with bearish sentiments since May. The trend line shows that January to March was a quarter of stabilization but April led to a reversal.

CryptoSlam ETH NFT Composite which measures the performance of the Ethereum NFT market is down 36% YTD. CryptoSlam SOL NFT Composite is down 50% YTD while the NFT market on Polygon and Cardano have declined by 88% and 47% respectively.

This implies that the interest in NFTs is waning across chains.

IntoTheBlock reports that the NFT trading volumes have been flat since July.

However, a CryptoPunks NFT along with 3 Autoglyphs collectibles topped the sales list in the last 30 days. The Axie Infinity NFT collections lead in terms of all-time sales volume, with a total sales volume of $4.28 billion on the Ronin blockchain, with over 22.1 million transactions and almost 2.1 million unique buyers.

Cryptoslam rankings place Bored Ape Yacht Club (BAYC) on Ethereum second on the list with $3.19 billion in sales, 43,717 transactions, and 6,163 unique buyers. CryptoPunks holds third place here with $2.9 billion in sales across 24,289 transactions and 2,815 buyers on Ethereum.

Decline in NFT wash trading indicates end of speculation

According to Binance Research, Ordinals-based Bitcoin Puppets and NodeMonkes saw brief increases and moved against the trend in September. Blast also reportedly saw a monthly increase of 30%, likely due to activity from the Fantasy.top trading card game.

Over the last month, global NFT sales volume has reached $330 million after witnessing a decline of 44%, as per Cryptoslam. The total NFT transactions in the last month stood at 6.6 million, again with a decrease of 34%. Of this, $37 million was attributed to wash trading with 80,919 wash transactions.

The good news is that the practice of creating false demand by trading the same NFT multiple times through wash trading has seen a 90% decline. Despite that, the overall trade profit for the month has fallen by 34% and is at -$17.5 million.

Some analysts see the market decline as only the end of speculative trading. According to GII Research, the global NFT market is forecasted to grow at a CAGR of 30% between 2024 and 2028. This could indicate that as the market matures, the sustainability of the NFT and the double-digit growth will not merely depend on the hype around it. Utility could impact the market moving forward if it has to maintain the predicted annual growth rate.