In the second quarter, there was a significant drop in the sales of non-fungible tokens (NFTs) by 44%, possibly influenced by a surge in celebrity, political, and animal-themed memecoins, in addition to a downturn in the crypto market. Data from CryptoSlam reveals that NFT sales decreased from $4.14 billion in Q1 to $2.32 billion in Q2, reflecting a broader decline in the market.
Henrik Andersson, the chief investment officer at Apollo Crypto, described Q2 as a challenging period characterized by a 15% decrease in Bitcoin value and poor performance of many altcoins. He mentioned that the rise of meme coins might be diverting attention from NFTs, impacting their sales.
While NFT sales have been sluggish, memecoins are experiencing high trading volumes, with $3.4 billion traded in the past 24 hours alone, according to CoinGecko. The surge in memecoin trading is partly driven by the emergence of new celebrity tokens on platforms like Ethereum and Solana, along with the popularity of PolitiFi memecoins associated with the US presidential election.
The rise of Bitcoin-based Ordinals could further shift focus away from traditional NFTs in the upcoming months, according to Andersson. Despite this, network activity on Ordinals and Runes has declined recently, with Runes transactions dropping by 88% from their peak in June.
NFTs showed signs of recovery in the last quarter of 2023, generating over $3 billion in sales, indicating a potential resurgence for NFTs in the latter half of 2024. Top NFT collectibles such as CryptoPunks and Bored Ape Yacht Clubs maintain substantial market caps, unlike the leading Ordinals projects like NodeMonkes and Bitcoin Puppets, which have smaller market cap figures.
The proliferation of memecoins raises questions about whether they align with the foundational principles of cryptocurrency or serve a different purpose, as explored in the article “Meme coins: Betrayal of crypto’s ideals… or its true purpose?”