According to Henrik Andersson, Apollo Crypto’s chief investment officer, the recent surge in memecoins themed around celebrities, politics, and animals, along with a broader crypto market decline, may have contributed to a 44% drop in non-fungible token (NFT) sales in the second quarter.
Data from CryptoSlam indicates that NFT sales fell from $4.14 billion in the first quarter to $2.32 billion in the second quarter, reflecting a broader market downturn.
“Q2 was a challenging market, with Bitcoin declining by 15% and many altcoins performing even worse,” said Andersson. “Additionally, meme coins are likely diverting attention away from NFTs.”
The term “mind share” in marketing refers to the level of consumer awareness or popularity of a particular product or idea.
While NFT sales have slowed, memecoins continue to experience high trading volumes, with $3.4 billion traded in the past 24 hours alone, according to CoinGecko data.
This trend has been driven by the rise of PolitiFi memecoins related to the United States presidential election, as well as the emergence of new celebrity tokens on Ethereum and Solana. Among the notable memecoins that increased in value in the second quarter are MAGA (TRUMP) and Pepe.
Ordinal inscriptions to take more market share
Henrik Andersson also pointed out that the rise of Bitcoin-based Ordinals might divert more attention from traditional NFTs in the coming months.
“In the long run, we believe Bitcoin ordinals will continue to gain market share in the NFT space, especially with the introduction of numerous Bitcoin Layer 2 solutions,” said Andersson. However, recent weeks have seen a decline in network activity for both Ordinals and Runes.
Runes transactions have dropped by 88% from their peak in June, and over the past week, both Ordinals inscriptions and Runes have generated less than 2 Bitcoin (BTC) per day in miner fees.
Despite recent challenges, NFTs have shown resilience in the past. They experienced a minor revival in the last quarter of 2023, with over $3 billion in sales, suggesting potential for another resurgence in the latter half of 2024.
Notably, December 2023 saw $1.77 billion in sales, the highest since the decline of the NFT summer in June 2022.
Leading NFT collections like CryptoPunks and Bored Ape Yacht Club continue to maintain significant market caps, at $994.9 million and $345.9 million respectively, according to CoinGecko data. In contrast, the largest Ordinals projects, NodeMonkes and Bitcoin Puppets, have market caps of $121.1 million and $94.2 million.
