NFT sales fell 44% as crypto dipped, memecoins steal ‘mind share’ in Q2

A recent influx of celebrity-endorsed, politically-themed, and animal-themed memecoins, coupled with a cryptocurrency market downturn, may have contributed to a 44% decline in non-fungible token (NFT) sales during Q2, according to Apollo Crypto's investment chief.

Data from CryptoSlam indicates that NFT sales plummeted from $4.14 billion in Q1 to $2.32 billion in Q2, mirroring a broader market downturn.

"Q2 was a challenging market with Bitcoin declining by 15% and many altcoins performing significantly worse," Henrik Andersson, chief investment officer at Apollo Crypto, told Cointelegraph.

NFT monthly trading volume since June, 2017. Source: CryptoSlam

"Meme coins are likely diverting some attention away from NFTs," Andersson added.

Mind share, a marketing term, refers to the level of consumer awareness or popularity associated with a specific product or concept.

While NFT sales have slowed, memecoins continue to generate substantial trading volumes, including $3.4 billion in the last 24 hours alone, according to CoinGecko data.

This surge has been largely fueled by the rise of PolitiFi memecoins tied to the United States presidential election, as well as the emergence of numerous celebrity tokens on Ethereum and Solana.

MAGA (TRUMP) and Pepe (PEPE) are among the memecoins that experienced price increases during the second quarter.

Ordinal inscriptions may claim market share

Advancements in Bitcoin-based Ordinals could also shift attention away from traditional NFTs in the coming months, Andersson noted.

"Longer term, we anticipate Bitcoin ordinals will continue to gain market share in the NFT space, particularly given the proliferation of Bitcoin Layer 2 solutions."

Related: Celebrity memecoins highlight crypto's influencer problem

However, network activity on Ordinals and Runes has also declined in recent weeks.

Runes transactions have fallen by 88% from their June peak, and both Ordinals inscriptions and Runes have generated less than 2 Bitcoin (BTC) per day in miner fees over the past week.

NFTs have rebounded in the past

NFTs experienced a modest recovery in the final quarter of 2023, generating over $3 billion in sales, signaling potential for an NFT resurgence in the latter half of 2024.

This included a $1.77 billion sales month in December 2023, the highest since NFT sales began to decline in June 2022.

Leading NFT collectibles such as CryptoPunks and Bored Ape Yacht Clubs continue to maintain substantial market caps of $994.9 million and $345.9 million, respectively, according to CoinGecko data.

Largest NFT projects by market cap. Source: CoinGecko