NFT Sales Decline in September
Sales declined in September, causing further damage to the NFT sector. Sales for the month came to $296 million overall, a noticeable 20% decrease from August’s $373 million, according to data from CryptoSlam. It is concerning because this loss marks an 81% drop from the peak sales figure of $1.6 billion achieved in March 2024.The monthly sales volume dropped below $109 million, or less than $300 million, for the first time since January 2021.
NFT transactions also saw a notable drop in addition to this revenue loss. There were only 4.9 million transactions in September, down 32% from 7.3 million in August. This pattern suggests that many collectors and investors are evaluating their plans and behaving more cautiously on the market.
The average value of NFT transactions unexpectedly increased by 18%, from $50.71 in August to $60 in September. This increase indicates that fewer NFTs are sold overall, but the ones that are are selling for more money. These particular NFTs can appeal to collectors who anticipate a large value increase over time.
The decline in the NFT market is being monitored concurrently by the US Securities and Exchange Commission (SEC). OpenSea CEO Devin Finzer declared on August 28 that the business has received a Wells notice from the SEC. This warning brought attention to the regulatory challenges the NFT market faces and raised concerns about future sales and the general expansion of the business by indicating that certain NFTs might be considered unregistered securities.
Industry executives are divided by the SEC’s measures.The SEC fined Flyfish Club, a restaurant with an NFT motif, $750,000 on September 16th for selling NFTs. Those opposed to this enforcement action included two SEC commissioners, Hester Peirce and Mark Uyeda. They argued that since Flyfish’s NFT sales are only an alternate way to market memberships, they shouldn’t be governed by securities laws.
The leaders of NFT expressed a combination of dissatisfaction and doubt regarding the SEC’s strategy in their responses. Luca Schnetzler, CEO of the popular NFT collection Pudgy Penguins, branded the SEC’s measures as “nonsense.” He referred to the agency’s emphasis on OpenSea as a “nothing burger” in an earlier interview. Schnetzler underlined that larger firms engaging in NFTs, such as Sotheby’s, Nike, and Pokémon, also face scrutiny. This circumstance begs the question of how NFTs will fare in the changing regulatory landscape.
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