After a series of amazing sales in recent months, most notably the exceptional Beeple auction at Christie’s, the Crypto Art market seems to be showing signs of cooling down.
In fact, in the second week of March, NFT sales stood at around $19.3 million while today they are at $5.5 million. This is a bit of a blow, perhaps due to the fact that the levels of enthusiasm reached between February and March were no longer sustainable.
The market, however, seems to have regained some momentum after the negative peak reached at the end of March with a drop of 85%, which has now recovered to 67%. Despite this, daily sales of NFTs are still low, with the number of NFTs sold down from $1.7 million to $547,960 and the number of digital buyers down from 4,107 in mid-March to 1,527.
It remains to be seen whether this is simply a speculative bubble destined to burst, or whether it is an adjustment of course.
Crypto Art has attracted many artists who previously had no chance to emerge in the traditional art world and who now seem to be racking up one record after another. Perhaps this is why a downturn was inevitable: without a real demand and with such a large supply of NFT works, a standstill after an initial moment of great enthusiasm was to be expected.
In a digital art market so different from any other, even established artists find it difficult to match the large numbers of leading crypto artists such as Beeple, Pak, Hackatao or 18-year-old FEWOCiOUS. This is probably because the collectors of crypto art are not, at first glance, traditional collectors but curious and attentive enthusiasts who have invested and collected large sums of money in cryptocurrencies and who have known this world very well since before the outbreak of the phenomenon.
What is more difficult to explain, however, is the very peculiar way in which NFT collectors are bidding: instead of the usual method whereby prices rise in regular and standard increments, they prefer to play on the extreme upside with astounding proposals in the final minutes of the auction: an indication that could serve as confirmation of the legitimacy of this still nascent market precisely because of these large numbers. This is also demonstrated by the growing interest of giants such as Phillips or Sotheby’s who recently sold Pak’s “The Fungible Collection” series for $17m via Nifty Gateway.
Although the figures show a decline in the market, Nonfungible.com claims that there has been no slump, but rather a stabilization after several record sales: although prices have settled at around $1,500, this “represents an increase of about 10 times the average price of an NFT compared to six months ago, i.e. $142 at the beginning of October 2020”, the website stated.