NFT Market Bound For Correction, Crypto Portfolio Managers, Collectors Say

“Just like any instruments in the market, I believe NFTs will see a correction,” BKCoin Capital’s Kevin Kang told Blockworks

article-image

Source: Shutterstock

share

key takeaways

  • OpenSea’s trading volume has declined 36.9% in the past month, according to DappRadar
  • Per Google Trends, global search entries for “NFT” have plummeted since February

From artist Beeple selling an NFT for $69 million at Christie’s auction house to Block’s Jack Dorsey minting his first tweet, 2021 was the year of the NFT. 

Bullish signs carried into 2022. NFT (non-fungible token) marketplace OpenSea notched a record single-day trading volume in January at $261 million of ether, according to data from Dune Analytics. The platform also recorded 546,000 active users — another record high.

Benjamin Cohen, managing partner of crypto fund Web 3 Equities, told Blockworks when a market grows “that fast,” it is “ fair to assume that [it] will experience large swings and corrections.”

The multi-billion-dollar industry took a turn in February. OpenSea’s trading and transaction volumes fell, plunging 36.9% and 14.49% respectively over the past month, according to blockchain data dashboard DappRadar.

OpenSea monthly USD volume | Source: Dune Analytics

NFTs generated over $4 billion in sales in February, per DappRadar – declining 28% from January. Trading volumes last month, however, are still higher than November and December.

Searches for “NFT” dropped 58% in February from January, according to Google Trends.

Searches for “NFT” dropped 58% in February from January | Source: Google Trends

“Just like any instruments in the market, I believe NFTs will see a correction,” Kevin Kang, founding principal at crypto hedge fund BKCoin Capital, told Blockworks. “NFTs will not be immune to the risk-off sentiment in the market as mainstream art collectors tend to see NFTs as a riskier asset.”

Potential signs of a downturn include Sotheby’s CryptoPunk auction, where a pseudonymous consignor withdrew a lot of CryptoPunks — valued at $30 million — minutes before the sale.

Investors may also be put off by reports of an SEC investigation homing in on fractional NFTs’ potentially violating securities laws.

Stephen Young, founder of marketplace NFTfi, told Blockworks the “money grab projects will die” in NFTs, but the broader blockchain-based collectible market will not.

“[NFT] prices are a bit crazy, so we are in [a] kind of bubble and frothy stage of the market,” Young said. “[NFTs] are just disconnected from the bubble in the crypto markets. The [number of NFTs] will just continuously increase. At some point, there’s not going to be enough new people buying to be able to absorb that supply.”


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.jpg

Research

Bluefin possibly stands at an inflection point. The token is near an all-time low yet the protocol’s spot volume market share and derivatives exchange usage have been increasing month over month since its November launch. Given its current market position and the upcoming upgrades (for both Bluefin and SUI), there may be upside potential before the increased supply growth in December. However, strong opposition from existing competitors (like Cetus and Suilend), as well as new entrants (like Aftermath), pose key challenges to Bluefin’s medium-term success.

article-image

Top Committee Democrat Sen. Elizabeth Warren in her opening statement accused Atkins of “helping billionaire CEOs like Sam Bankman-Fried”

article-image

Introducing garbled circuits for enhanced privacy and regulatory compliance

article-image

Ross Ulbricht was a freedom maximalist building freedom tech, powered by Bitcoin

article-image

Solana validators can reap benefits including payments, votes and community clout

article-image

Sponsored

WalletConnect is cementing itself as the essential connectivity layer, ensuring wallets remain the entry point for billions of users

article-image

According to a legal filing, Galaxy Digital helped boost the price of LUNA while quietly selling its tokens