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NFT trading volume reportedly dropped by 97% since January

Yahoo Finance Live reports on the sharp decline in NFT trading since the beginning of 2022.

Video Transcript

RACHELLE AKUFFO: Trading in NFTs or non-fungible tokens has collapsed. Now since its peak at the start of 2022, volume has slid from $17 billion in January to about $470 million in September. That's according to data from June Analytics. Now that's also a drop of 97%. Now we all remember when we saw all this hype surrounding NFTs, it seemed like every artist, every athlete was coming out with their own NFTs.

But you had a number of issues. We saw that falling along with what we saw with falling crypto prices, but more importantly, a real lack when it came to secondary market demand. You buy the thing, and then what? Who is actually going to buy it from you for these incredible prices that people were paying, Seana? So I mean, this-- I feel like this was inevitable.

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SEANA SMITH: Yeah, I never got on board with it. I never understood why people were paying tens of millions of dollars for a picture of a gorilla or something like that, something that they don't actually own the physical picture of. It didn't make a lot of sense to me. The fact that we've seen such a drop in the NFT market, I think, makes a lot of sense.

Taking a look at some of the Google search trends that we have seen, comparing to what we saw back at the beginning of the year, so it's actually down. The Google search trends for buy NFT and sell NFT are off just over 90%, compared to what they were in January, when those prices were way too high. Dave, we needed a correction in the market. I think a lot of the big players in the NFT market say that same thing. They need to work out some of that froth in order to actually grow and build a market that's going to be here for the long run.

DAVE BRIGGS: Yeah, I talked to Gary Vaynerchuk about that serial entrepreneur who was really in this space early on. And he likened it to what you just said. It really needed to go through this to get rid of some of these frauds, some of these pretenders. I'm paraphrasing what he's saying. But he predicted this a year ahead of what we're seeing now.

Now, there's an interesting term that's developing. You talk about something that is physical, but now the term is phygital. So maybe phygital NFTs are the future, which gives you a physical component of an NFT. Or I think the other thing that can save NFTs is a practical application, in particular, in the sports and concert space. Can an NFT act as a ticket in the future as both a collectible and a way to enter these venues? That, I think, might give us some rebound here.

But look, another problem for this, Rachelle, has been their purchase mainly with Ether. Ether is down 65% year to date and never got that bounce from the merge that we all predicted. It's even down in the last month. So a lot of problems to go into in the NFT space, and not a lot of optimism.

RACHELLE AKUFFO: No, I agree. I mean, a lot of people thought Ether was going to go up after the merger, but I think they forgot that this was a technical upgrade. This wasn't actually going to affect the price of Ether. But when you really don't educate yourself on some of these things, these are the kind of things that you fall into.

And then when you also look at the utility factor, which I think is interesting that you mentioned, once you attach to something like a player experience or something else, then you're really adding some sort of tangible value. But an image that someone could just take a picture of and send elsewhere, I think they were on that losing end. But maybe some, once this froth clears away. The ones that have utility, I think, will be the last ones standing.

DAVE BRIGGS: Yeah, like that Tom Brady, Seana. Now the Tom Brady experience, the opportunity to meet TB? That, I think, people would invest in. And that's what Autograph is up to.

SEANA SMITH: Yeah, you need that real life application, I agree with you, in order for this to take off. I think too many people are struggling to really wrap their heads around the whole NFT space. As it is right now, I am one of those people.