NFT Market Cools as Traders Flock to Soaring Memecoins

With NFT volumes in decline and a surge in memecoin trading, market behavior suggests a new preferred asset for crypto enthusiasts.

Posted April 1, 2024 at 1:16 pm EST.

As the 2024 bull market gets underway, the NFT market is cooling as the burgeoning, and yet already massive, world of memecoins takes off. 

NFT sales have plateaued at around $1.3 billion monthly—a significant comedown from their peak in January 2022, when sales hit $6 billion with the Ethereum price then the same as now, according to data from CryptoSlam. Meanwhile, memecoin trading stands at roughly $10.7 billion a day, according to CoinMarketCap, which projects to about $321 billion a month.  

NFT sales monthly volume. Source: CryptoSlam

As NFTs Lag, Memecoins Gain Traction

Despite an influx of NFT innovations, including the advent of Bitcoin ordinals in 2023, the NFT market hasn’t regained its former vitality. The sustained low sales figures, even in the midst of a broader variety of NFT offerings, suggest that traders might be seeking alternative opportunities. 

Meanwhile, memecoins stats tell a different story. In addition to the projected $321 billion a month in trading volume, the token category has amassed an incredible $64.7 billion in market capitalization. To put it into perspective, there are only less than 300 companies in the world that are worth over $64 billion, and these memecoins are just talking about dogs, cats and hats. 

Read more: Offensive Memecoins Proliferate on Solana, Sparking Debate

The Advantages of Memecoins

While both NFTs and memecoins are cultural tokens that embody the vibrancy of internet culture, memecoins fill this niche more naturally than NFTs. Memecoins are more liquid, making them easier to trade, especially for those looking to move assets quickly, in contrast to the sometimes-prolonged selling process associated with NFTs.

Read more: What Is Dogwifhat (WIF) and Why Is It Up so Much?

Although there’s been no study of the current onchain activity of past NFT traders, a Twitter poll by Unchained founder Laura Shin showed that almost three quarters of the 675 votes to date said that NFT traders have indeed shifted toward memecoins. 

One user noted, “A lot of us have shifted focus to memecoins [right now] because they are far more liquid—NFTs often you get stuck trying to sell.” Another said, “good traders will move to wherever the attention is and this cycle that will be memecoins.”

However, one other commenter countered saying, “I think some speculators may [have shifted], but the true NFT people are really into NFTs.”

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