<span style="font-weight: 400">According to a report by market research firm Nonfungible, the NFT market as a whole is on the verge of collapse. This conclusion was a result of the </span><a href="https://www.techtimes.com/articles/275082/20220505/nft-sales-dropped-92-september-2021-effect-elon-musks-tweet.htm"><span style="font-weight: 400">92% decline in NFT sales since September 2021</span></a><span style="font-weight: 400">. What's going on? These three terms could describe the current state of the NFT industry's press coverage. Apart from this, there are so many reports of the NFT market collapsing right now.</span>

<span style="font-weight: 400">If you merely look at the last four weeks, it becomes evident how shocking these claims are. The NFT market is growing at a rate that is far greater than that of cryptocurrencies, according to this analysis. But now, things appear to have changed. This means that the total was 103.7 percent more than expected, which is remarkable. The past performance in 2022 shows how obvious this rise is when compared to Bitcoin as a cryptocurrency. Only 1.9 percent was affected.</span>

<img class="aligncenter" src="https://qph.cf2.quoracdn.net/main-qimg-c89c242265e8e268903bc43b6f2c8bf2-lq" alt="Why is the NFT crypto bad? - Quora" data-wp-editing="1" />
<h2><strong>What are NFTs?</strong></h2>
<span style="font-weight: 400">"Non-Fungible Token" is the abbreviation for this technology. In the digital world of cryptocurrencies and blockchain networks, a token serves as proof of ownership. As such, in the cryptosphere, an NFT serves as a kind of title deed or authentication certificate.</span>

<span style="font-weight: 400">The Metaverse's virtual trade market relies heavily on ownership evidence like this. Because of the ease with which they may be copied or reproduced, digital products would be less appealing to sellers if they didn't have this feature.</span>
<h2><strong>Inevitable Slumps in the NFT market</strong></h2>
<span style="font-weight: 400">Is it any surprise that the NFT market can experience a downturn? All financial and asset prices are, after all, currently under some pressure from high inflation in Europe and the United States.</span>

<span style="font-weight: 400">The after-effects of the coronavirus pandemic and the </span><a href="https://www.cryptoknowmics.com/news/crypto-exchanges-in-a-tough-spot-amid-russia-ukraine-conflict"><span style="font-weight: 400">Russia-Ukraine conflict</span></a><span style="font-weight: 400"> are fueling this more and more. However, we can see a different picture when looking at the NFT market data in comparison to the current reports</span>
<h2><strong>Despite Its Flaws, The NFT Market Is Thriving</strong></h2>
<span style="font-weight: 400">A Wall Street Journal piece sparked the latest round of reporting. According to Nonfungible, the NFT market analysis platform, NFT sales have fallen by 92 percent since September 2021.</span>

<span style="font-weight: 400">According to Nonfungible, the number of active wallets in the Ethereum NFT market has decreased by approximately 88 percent. These reports are both disturbing, but let's see their starting position. There was a boom in NFT sales in September 2021, setting a new record.</span>

<span style="font-weight: 400">NFT market analysis platform also reports that there have been a few other flaws as well. While there have been losses, the NFT market is currently showing great strength. The reports from OpenSea, the largest NFT marketplace, show this as well. Around 550 million euros have been sold in the past few days since May 1st.</span>

<span style="font-weight: 400">Nonfungible's NFT market analysis software has not taken into account all transaction numbers because of the varying trading figures. Whether the NFT market does well or not isn't impacted by this.</span>
<h2><strong>NFT Growth Rate</strong></h2>
<span style="font-weight: 400">Furthermore, the various NFT projects prove that the NFT market is thriving. If you look closely at the most popular NFT initiatives, growth rates of up to 81% have been observed.</span>

<span style="font-weight: 400">The market as a whole has seen ranges from 39 percent to 49 percent in the arts and gaming sectors. Even with these numbers, a careful examination is all that is needed to categorize them appropriately. November 2021 saw a trading volume of $40 million for the P2E game Axie Infinity. It was the highest it had ever been.</span>
<h2><strong>Development of NFT Projects</strong></h2>
<a href="https://www.cryptoknowmics.com/news/us-cracks-down-on-crypto-mixers-following-axie-infinity-attack"><span style="font-weight: 400">Axie Infinity</span></a><span style="font-weight: 400"> and the $40 million in US dollars that were invested in the project have been largely wiped out. Only $500,000 is left in the bank. Drops of 39% add up quickly when $39.5 billion disappears from a single game in a matter of months. As a result, the value stability of each NFT project is drastically diverse.</span>

<span style="font-weight: 400">Some art and gaming projects have plummeted in value by as much as 41%, and some digital real estate has been affected. Especially when it comes to </span><a href="https://www.cryptoknowmics.com/news/decentraland-price-prediction-2022-2026-will-the-price-of-mana-hit-10-by-the-end-of-2022"><span style="font-weight: 400">Decentraland</span></a><span style="font-weight: 400"> or Sandbox, its worth can barely be evaluated accurately. As a result of this, there are a lot of uncertainties at the moment.</span>

<span style="font-weight: 400">With all the critical analysis that has been carried out, we can see that the NFT market is collapsing already. In contrast, the NFT industry's top 10 blue chips have increased by 81 percent in value since the beginning of 2022, making them the most valuable blue chips in the industry. There is absolutely no evidence of a collapse in this segment.</span>
<h2><strong>NFT's Future Remains a Mystery</strong></h2>
<span style="font-weight: 400">The recent development of the NFT market in the first few months of 2022 has shown that the market hasn't collapsed yet. Although, it is obvious that there have only been minor losses in some sectors. In September 2021, the market was growing at a fast rate which indicates that the market was developing well at that time.</span>

<span style="font-weight: 400">It's hard to know if this will be the case in the long run in these unpredictable times. The market decline cannot be ruled out as the epidemic, conflict, and inflation persist. In addition, fresh advancements and ideas from artists and developers will also play a role in the development of the market.  However, the industry as a whole must ask why the NFT market is in such a state of degeneration.</span>

<span style="font-weight: 400">It's hard to imagine that the current state of the NFT market would entice many new investors or existing investors to increase their financial commitments. This is even more important because the analysis used to support the current reporting contains major flaws. For NFT investors, confidence in current values is essential because the market can be manipulated into a crisis by inaccurate reporting.</span>
<h2><strong>Conclusion</strong></h2>
<span style="font-weight: 400">Compared to the rest of the crypto market, the NFT market is far more volatile. Values and pricing for collectibles ranging from art, sports, and general collectibles are governed by individual collectors' preferences.</span>

<span style="font-weight: 400">In the digital art and collectors market, collectors' behavior is susceptible to change, just like in the real world. Nobody would suggest that the art market as a whole will collapse when the value of individual works of art declines. The NFT market is not different. Even if the market's value will go through wild swings, investors will continue to make money and put money into the NFT market.</span>

Is The NFT Market Collapsing? What Does the Data Say?

The NFT market has been declining in volume and transactions, indicating that there may be more trouble on the horizon for non-fungible token (NFT) owners

Oluwademilade Afolabi is a freelance writer and editor passionate about blockchain technology and the health industry. He is a 6th year medical student, and has worked with various companies and blogs since the blockchain revolution began.

Is The NFT Market Collapsing? What Does the Data Say?

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