NFT activity continues to decline

The last two years have been rough for the NFT market, and 2024 doesn't look much better. With falling sales and investors losing appetite for digital artwork, market projections became less optimistic, showing only a modest 2.6% annual growth by 2028, twenty times less than this year. Moreover, the entire market faces a substantial user drop, showing that global interest in NFTs continues fading.

According to data presented by AltIndex.com, the total number of active wallets in the NFT space dropped to 197,000 in Q1, the lowest level since early 2021.

Ten straight quarters of NFT user drop

The global NFT market is facing another bumpy year. With collectors spending less and less money on digital artwork, the total NFT sales value recorded on the Ethereum, Ronin, and Flow blockchains plunged to $145 million on May 29, practically half the value seen on the same date in 2023, while the total number of sales dropped by 20% to 53,900. But besides plunging sales and revenue, the entire market has also been hit by a huge user drop, causing the total number of active wallets to sink to the lowest level since early 2021.

According to NonFungible data, in Q4 2021, when the popularity of non-fungible tokens skyrocketed, NFT marketplaces counted over 1.9 million active wallets, or five times more than the quarter before. However, after reaching this peak, the total number of wallets trading with NFTs started falling and has been doing so ever since. By the end of 2022, the number of wallets involved in NFT trading practically halved to roughly one million.

However, last year brought the biggest decline, with active NFT traders plunging by 78% to only 213,000 in Q4. Statistics show the negative trend continued in 2024, with the number of active wallets falling by a further 7% to only 197,000 in Q1. Moreover, this means the total active user count in the NFT space has been continually falling for ten straight quarters.  

NFT space lost 90% of users since the market peak in 2021

The aftermath of ten straight quarters of user drop showed devastating figures; over the past two and a half years, the NFT market has lost 1.75 million users or 90% of the figure seen at the market peak in 2021.

Even more worrying is that this figure is most likely to grow by the end of the year, as the negative trend continued in April and May.  On May 29, the NFT market counted roughly 28,000 active wallets, of which 13,000 were unique buyers- 47% less than on the same date last year.  

The number of unique sellers plunged by almost 40% in this period, falling from 25,900 to 15,800. A higher number of sellers indicates more supply than demand in the NFT space, which may cause NFT owners to lower their pricing, resulting in a further drop in NFT market value.