NFT Market Faces Lowest Sales Since 2021

Key Takeaways:

  • NFT sales hit a low in September 2024, declining by 20% from August.
  • SEC issues a Wells notice to OpenSea, raising concerns about NFTs as securities.
  • Despite regulatory pressures, industry leaders remain critical of SEC's approach.
NFT Market

YEREVAN (CoinChapter.com) — In September, the non-fungible token (NFT) market experienced a significant drop, reaching its lowest sales volume since 2021. Total sales hit $296 million, down 20% from the $373 million recorded in August. The decline has raised attention within the digital collectibles space, as the market continues to face challenges.

NFT Monthly Sales Trends 2024 | Source: CryptoSlam





NFT Monthly Sales Trends 2024 | Source: CryptoSlam
NFT Monthly Sales Trends 2024. Source: CryptoSlam

NFT Transactions and Sales Decline

Data from CryptoSlam revealed that NFT sales volumes have not fallen below $300 million since January 2021, when monthly sales reached $109 million. The decrease in NFT sales is part of a broader trend, with total sales dropping 81% since March, when sales peaked at $1.6 billion. Along with this drop in sales, the number of NFT transactions fell 32%, from 7.3 million in August to 4.9 million in September.

Despite fewer NFT transactions, the average value per transaction rose. The average price increased from $50.71 in August to $60 in September, marking an 18% rise. This shift shows that while fewer NFTs are being traded, the ones that are sold tend to be of higher value.

Regulatory Scrutiny from the SEC Hits NFTs

While NFT sales decline, the market is also facing growing regulatory scrutiny. The U.S. Securities and Exchange Commission (SEC) has begun targeting NFTs, with a particular focus on whether some digital assets qualify as securities. On Aug. 28, OpenSea, a major NFT marketplace, received a Wells notice from the SEC. The notice suggested that some NFTs traded on the platform might need to be registered as securities.

OpenSea's Response to SEC Wells Notice | Source: X
OpenSea’s Response to SEC Wells Notice. Source: X

In addition, the SEC fined Flyfish Club, an NFT-themed restaurant, $750,000 for NFT sales. The commission argued that these digital assets might violate securities laws. However, some SEC commissioners disagreed with this action. Hester Peirce and Mark Uyeda stated that these NFTs were simply a new method of selling memberships and should not trigger securities laws.

Industry Reactions to the SEC’s Moves

Despite the SEC’s actions, some NFT leaders have downplayed the regulatory threat. Luca Schnetzler, CEO of Pudgy Penguins, described the SEC’s actions against OpenSea as unnecessary. In an interview Schnetzler noted that targeting OpenSea could lead the SEC to pursue larger organizations such as Nike, Sotheby’s, and Pokemon, which have also embraced NFTs.

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