Basri Caneri 
The NFT market had a rough start to 2024. According to DappRadar’s report dated March 6, the trading volume of NFTs suffered a major setback, dropping by 63% compared to December.
The signs of recovery that NFTs showed in the last months of 2023 were quickly replaced by a decline as the new year began. While there was a 26% loss in trading volume in January, the decline reached 50% in February.
What Causes the Decline in NFTs?
The decline in the NFT market seems to be closely linked to fluctuations in the overall cryptocurrency market. DappRadar analyst Sara Gherghelas notes that NFT prices are highly correlated with major cryptocurrencies such as Bitcoin and Ethereum.
Developments in the crypto market in recent months also support this decline:
- December 2023: The total value of the crypto market reached a new high of $3.71 trillion.
- January 2024: Bitcoin hit a record high of $109,000.
- February 2024: Markets experienced uncertainty due to US President Trump’s trade policies and crypto assets saw a sharp pullback.
This uncertainty was reflected in the NFT market, leading investors to become risk-averse and move away from NFTs.
Interest in NFTs Did Not Decline, Number of Users Increased
Although trading volume declined, the number of users interacting with NFT platforms increased by 6% to 3.5 million in February.
The biggest reason for this increase is the growing interest in AI-powered NFT projects. AI integration is transforming NFTs from mere collectibles into interactive and useful digital assets.
Gherghelas notes that this trend could change the direction of the NFT market in the future:
“Speculative NFT trading may be subject to fluctuations, but projects with strong use cases will shape the Web3 ecosystem in the long run.”
Which NFT Categories Stand Out?
Even though NFT trade volume declined, some categories continued to gain traction:
- Profile Picture (PFP) NFTs: $243 million in volume with76,385 sales.
- Gaming NFTs: 421,853 assets changed hands, generating $41 million in volume.
- Sports NFTs: 659,097 transactions worth $7.7 million were traded.
It is noteworthy that gaming and sports NFTs in particular remained smaller in terms of total volume despite the high number of sales. This shows that individual investors are making their presence in the market with smaller transactions rather than large-scale NFT purchases.
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