NFT sales hit 12-month low after cryptocurrency crash

theguardian.com:

Non-fungible tokens have been swept up in the cryptocurrency crash as sales reached a 12-month low in June.

NFTs confer ownership of a unique digital item – often a piece of virtual art – upon someone, even if that item can be easily copied. Ownership is recorded on a digital, decentralised ledger known as a blockchain.

Sales of NFTs totalled just over $1bn (£830m) in June, according to the crypto research firm Chainalysis, their worst performance since the same month last year when sales were $648m. Sales reached a peak of $12.6bn in January.

“This decline is definitely linked to the broader slowdown in crypto markets,” said Ethan McMahon, a Chainalysis economist.

“Times like this inevitably lead to consolidation within the affected markets, and for NFTs we will likely see a pullback in terms of the collections and types of NFTs that reach prominence.”

The cryptocurrency market, worth about $3tn last November, is now worth less than $1tn.

NFTs rely on a blockchain – the decentralised ledger first used by bitcoin to track ownership of the cryptocurrency – to record who owns them and allow them to be traded. Most are based on the Ethereum blockchain, which is maintained through a carbon-intensive system called proof of work.

At its peak, the NFT market was attracting vaulting sums including $2.9m for a token of the first tweet by Twitter’s cofounder Jack Dorsey. A digital collage by the visual artist Beeple sold for $69m; the main token for the “play to earn” video game Axie Infinity hit a total value of $9.75bn; and Coca-Cola raised more than $575,000 from selling digital items such as a customised jacket to be worn in the metaverse.

According to the Chainalysis data, NFT sales peaked in January. In April an attempt to sell on