INTEREST in the metaverse NFTs is dropping, and dropping fast. But those declaring the death of the digital sphere are premature to say the least.
When Mark Zuckerberg changed Facebook’s name to meta last October and unveiled his plans to create a metaverse, interest in the potential of blockchain technology exploded.
Similarly, sale value for non-fungible tokens hit record levels at the start of this year, with January seeing nearly $15billion worth of total trading volume.
Analysts were left excited about the future growth of NFTs and the metaverse.
However, fast forward six weeks and there is a far more downbeat narrative being painted.
NFT sales in February dropped off by almost a third compared to the month before, with approximately $10.6billion worth of trade conducted.
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The average price for a non-fungible token dropped below $2,000, down from an all-time high of almost $6,900 on January 2.
At the same time, Google searches for the metaverse and NFTs have also plunged.
Searches for the terms have been dropping since the end of January, with interest now at levels last seen at the start of October.
But those looking at the decline in as the beginning of the end are missing the bigger picture.
New users join the NFT space
While there has been a decline in the price of NFTs and in the total sales value from record highs, the number of people entering the space continues to grow.
Analysts at DappRadar registered an eight percent rise in total NFT traders in February.
At the same time, there was a two percent increase in the total number of tokens sold.
Prices in all markets fluctuate, and price is only one factor that should be considered when assessing the development of NFTs.
In the longer run, with more more people buying and selling NFTs, prices will recover.
The diversification of those interested in the assets points to the very opposite of NFTs being a “bubble”, the market is maturing.
The metaverse isn’t built in a day
Rome wasn’t built in a day, as the saying goes – and the metaverse won’t be either.
Google searches for “metaverse” surged after Zuckerberg’s announcement last autumn, but a lack of immediate developments has understandably led to less news on the topic and less reason for those interested to keep checking for updates.
But that doesn’t mean there isn’t work quietly taking place.
Zuckerberg is dedicating billions of dollars to help build his vision for a virtual world.
Interest will again likely pick up as the results of his project are unveiled.
At the same time, high profile brands and companies are continuing to join other metaverse platforms already in existence such as Decentraland and the Sandbox.
It was years before concepts such as online shopping became dominant, despite the internet being in existence since the early 1990s.
Slowly but surely, as firms adopt to the metaverse, people around the world will too. It was never going to happen in a single moment.
The lessons of 2017
Cryptocurrencies were on the rise in 2017. What happened next is a lesson for those doubting NFTs and the metaverse.
Bitcoin saw its price rise to as high as almost $20,000 in December, before crashing down.
It hit a low of just $3,183 a year later in December 2018.
Following Bitcoin’s lead, other cryptocurrencies saw crashes of their own.
Then, like now with the metaverse and NFTs, the naysayers claimed cryptocurrencies were a thing of the past.
They said the digital coins were a fad and a bubble that would never recover.
Since then crypto market has rallied. Bitcoin’s price hit a record high of $64,400 in November 2021 and even after a drop off since then, it is trading at a higher value than in 2017.
New cryptocurrencies continue to be mined, and an increasing number of companies now accept the coins as authorised payment.
Governments around the world now seem to have accepted crypto will always be a part of the financial landscape and are scrabbling to come up with strategies on how to interact with the coins.
In a similar vein, just because there has been a dip in interest in the metaverse and NFTs now does not mean there won’t be renewed growth in the months and years ahead.
