Digital images ingrained within sophisticated software, controlling the availability and trade of such images and paid for through the use of cryptocurrency: NFTs. Yet, you can bypass all of that with a simple click of the “PrtSc” button. The logic behind such a concept for easily accessible images with such a high price tag attached to them seems like it would be extremely unpopular, and you could not be more wrong. Emerging from nowhere, NFTs skyrocketed to a $25 billion industry. Peaking within the middle months of 2021, the idea (along with the sales) of non-fungible tokens were skyrocketing and the world was taken by storm by a variety of monkey sketches. Everyone and their mother were running to buy Ethereum, a cryptocurrency and the main currency of NFTs sales, to invest in these so-called profitable pixel stick figures, but then all of a sudden it all went quiet. There were no signs of the incoming value drops, the sudden stops to NFT line projects, or the deadness of the market. It just happened. 

The biggest highlighting factor of the NFT is very obviously the somewhat trust-based process of the platform. The prospect of a stable rate for the exchanges made through a blockchain, especially one that finds its trust in the process of creatoral capitalism is simply not feasible. Fluctuating rates of trade and market modifications such as the consumer serviceability of the platform heavily affects the market cap of the industry, along with its trade volume. After the platform and the structural process of NFTs has been established, the creation, marketing, and maintenance of such NFTs brands is very complex. The willingness of creators to create their own token brands is declining very rapidly leading to an overall decrease in the trade volume of NFTs. This theme is prominent within the 19% decrease of seller availability within the market, using the fourth quarter of 2021 and the first quarter of 2022 as comparison.

On top of the willingness of creators to make more NFTs, the market in itself seems to offer no additional profits for the average NFT creator. According to statistics tracker website NonFungible.com, it is clearly visible that the number of sales from the fourth quarter of 2021 as compared to the first quarter of 2022 has nearly halved, with the sales transitioning from 14 million to about 7.82 million. A majority of these can be attributed to “NFT holding”, which creates a monopolization effect on the market. Even disregarding the preceding figures, the amount of buyers within the market have also significantly dropped from 1.7 million to about 1.1 million. The hesitancy of the consumers attached to the market can be seen, showing a stark contrast to the vibrancy of the NFTs industry within quarter four of 2022. 

Last but not least, as every other economic sector these days, the Russia-Ukraine conflicts have been stirring inconveniences for the blockchain. A basic understanding of the currency system of NFT marketplaces such as OpenSea and Rarible basically dictates that an NFT is bought, not using USD, but rather through the mediums of cryptocurrency wallets. The most frequent cryptocurrency used within marketplaces is Ethereum (ETH). Of course like any other crypto currency, ETH can only be created through the process of data mining, which takes an obscene amount of PC hardware to actually take place. However, looping back to the Russia v. Ukraine conflict, international conflicts have held up the production of data mining equipment. The supply and demand doctrine of basic capitalism will obviously dictate the course of any object worth value, and due to the fear of losing a stable cryptocurrency, ETH owners have sold the stock to point of declining index value. The declining value on Ethereum will decrease the values of NFTs, due to the set price being, for example, .05 ETH and not 10 US dollars. 

Although some critics say that the decline is only a temporary sign of divergent trading, the optimism does not seem to be supported by the data. In total, due to a mixture of a variety of reasons, the NFT industry is seen to be declining at a rapid pace, but the results of a consistent decline might be disastrous for a multitude of other businesses and fiscal sectors.