The unique number of nonfungible token (NFT) buyers in February dipped below 800,000 for the first time since October, and search volume for nonfungibles also dropped significantly.
According to data from CryptoSlam, there were 796,009 NFT buyers on secondary markets in February (down 12% compared to January) that accounted for roughly $2.6 billion worth of sales (down 40% on the month before).
However, a caveat is that January was a massive month for NFTs, suggesting the decreases in February are simply part of a relatively healthy pullback. January saw a record number of unique secondary NFT buyers at 904,13, and OpenSea also posted record sales volume in January, totaling around $5 billion before pulling back to around $3 billion last month.
Looking at Google Trends, however, it appears that global keyword search volume for “NFTs” has also dropped significantly. Over the past week, interest has dropped roughly 60-70% from the heights of late January (Jan. 23- Jan.29).
The United States represents the most interest globally at the time of writing while Japan currently shows the lowest interest in NFTs out of 61 nations, despite local tech and telecommunications giant Rakuten launching an NFT marketplace late last month.
NFT proponent and managing partner of NFT investment fund Sfermion Andrew Steinwold likened the current pullback to the bull market and subsequent crash of 2017/2018, as he questioned whether interest would pick back up again anytime soon.
Worldwide NFT search volume fell off a cliff
Reminds me A LOT of the crypto 2017 bull market and subsequent 2018 bear market
How long will the disinterest last until it starts to pick back up? Or will it? pic.twitter.com/4iQxcpLuYP March 2, 2022
The Russian and Ukrainian conflict may have also shifted the focus to cryptocurrencies, as global attention appears to have shifted to use cases such as digital payments, fundraising and storing value amid uncertain times.
The United States Securities and Exchange Commission (SEC), led by crypto-skeptical Chairman Gary Gensler, is reportedly investigating nonfungible token (NFT) creators and marketplaces for securities violations, according to a report from Bloomberg.
Anonymous sources in the report claimed that the SEC is investigating whether “certain nonfungible tokens […] are being utilized to raise money like traditional securities.”
Throughout the last few months, attorneys from the SEC’s enforcement unit have reportedly sent subpoenas demanding information on specific NFTs and other token offerings.
While crypto lending products have been the subject of great regulatory scrutiny over the past year, this report marks a major move into investigating the NFT sector. The inquiry shows that the SEC is taking a particular interest in how fractional NFTs are being used. That‘s where a more valuable NFT is tokenized into smaller pieces and onsold.
The warning signs have been clear for a while with Hester Peirce, also known as Crypto Mom, stating back in March 2021 that selling fractionalized NFTs could be breaking the law.
“You better be careful that you’re not creating something that’s an investment product — that is a security.”
This investigation is the latest in a wave of clampdowns that seek to govern the cryptocurrency market more firmly. Most recently, the SEC ordered that New Jersey-based crypto lending company BlockFi pay a record fine of $100 million for failing to list “high-yield” lending products as securities.
While Bitcoin (BTC) and Ether (ETH) have been able to avoid scrutiny owing to the fact that they aren’t considered securities by the SEC — at least, not yet — other digital assets have not enjoyed the same reprieve. Unlike the case with Ripple Labs the parent company of Ripple (XRP), which has been embroiled in a legal case overselling “unregistered securities” since late 2020.
Chinese tech conglomerate Tencent has filed for a virtual concerts patent with the Chinese National Intellectual Property Administration (CNIPA), according to business data-tracker Qichacha. The application comes as Chinese companies race to secure metaverse trademarks.
The People’s Bank of China (PBoC) took a strong stance against the Metaverse and nonfungible tokens (NFTs) in November, stating that it would track them with Anti-Money Laundering (AML) tools. However, according to the Chinese news outlet The Paper, more than a thousand Chinese companies have submitted over 16,000 metaverse-related trademark applications.
Despite the warnings, the Chinese multinational technology and video-game colossus Tencent has been leading China’s charge into the Metaverse.
According to the South China Morning Post, sources claim that Tencent sent out an internal letter to its employees in October last year, concerning the creation of a new “F1” studio under its subsidiary, TiMi Studios, that will involve employees from China, the United States, Canada and Singapore.
On December 31 of last year, Tencent held China’s first-ever virtual concert in the Metaverse, a New Years celebration called TMELAND which saw over 1.1 million fans join in over the duration of the festival. Tencent has also acquired Los Angeles-based animated concert company Wave, which uses motion-capture technology to create realistic virtual concerts.
This Daily Dose was brought to you by Cointelegraph.