MR PRO | State of NFT Markets July 2023

GM PRO DOers!

Time to talk about NFTs… This past year has been a really tough one for our beloved JPEGs.

In just the last year, the market cap of all NFTs has been cut in half, despite thousands of new NFTs being released during that time. 😨

Even worse, the crown jewels of the NFT market, the so-called “Blue Chips” like BAYC, Cryptopunks, etc., are tanking hard too… 😢

I'm aware that many of our readers at Milk Road PRO got their start in crypto and web3 by investing in NFTs over the last few years, so these charts likely sting…

It’s safe to say that investing in crypto and web3 is not for the faint of heart. 

You can earn A LOT of money in this space, but you can lose A LOT too. 💔

So the question is… did we just lose A LOT of money in NFTs?

Or, like crypto’s past, are we just in a “winter” after a blown-out hype cycle of a new innovation that will bounce back with vengeance? 🤔

Here’s some context: For those who weren’t in crypto during its last hype cycle back in 2016-2019, the novelty of launching fungible tokens on top of blockchains sent the market cap of crypto skyrocketing in 2017.

ICOs (Initial Coin Offerings) was a brand new use case for blockchains (specifically Ethereum) back in 2017 and it was the birth of many tokens that we know and use today. 

That said, similar to NFTs over the last year, many people capitalized on the hype and launched tokens with no utility or business/product behind them, just a useless token based on hype.

When the hype settled, the markets tanked. 😥

Here’s a chart of the crypto market cap (excluding Bitcoin) in 2018.

The market cap of fungible tokens plummeted from $480 Billion to $40 Billion within 1 year. 🤯

Back then, many thought that tokens on the blockchain were dead and would never become a reality. It was all just a bunch of hype and scams.

Sounds pretty similar to NFTs today, doesn’t it? The chart above looks pretty similar to the NFT chart above too… 📉

But if I zoom out on that chart above, here’s what happened to the market cap of fungible tokens during the next few years…

The market cap skyrocketed from $40B up to a peak of $1.7 TRILLION over the next 3 years.

Of course, we are now in this cycle’s “crypto winter” where we sit at a market cap of $550 Billion… Still, it’s a nice 13.75x from the bottom of the crypto winter in 2018. ❄️

The question I’m poised to answer in today’s report is… “Will NFTs have a similar cycle to crypto?”

…and if NFTs aren’t dead ☠️, where are we at in this NFT cycle? Should you be buying or selling your NFTs? 🤔

Let’s dive into the onchain data and see where things are at today. 👀🔛⛓️

The State of NFTs in July 2023

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