The cryptocurrency market experienced a downturn in the second quarter of 2024, leading to a significant decline in the sales of non-fungible tokens (NFTs). According to data from CryptoSlam, NFT sales fell by 44%, from $4.14 billion in the first quarter to $2.32 billion in the second quarter.

The chief investment officer at Apollo Crypto, Henrik Andersson, attributed this drop to a combination of factors. The broader market downturn, with Bitcoin declining by 15% and many altcoins performing even worse, played a role. Additionally, the rise of celebrity-themed and political meme coins, which have been capturing a significant amount of "mind share" (consumer awareness and popularity), may have diverted attention away from the NFT market.

Meme coins have continued to see massive trading volumes, with $3.4 billion in the last 24 hours alone, according to CoinGecko data. The surge in PolitiFi meme coins linked to the United States presidential election, as well as the emergence of several new celebrity tokens on Ethereum and Solana, have contributed to this trend.

Andersson also noted that the developments in Bitcoin-based Ordinals may drive attention away from traditional NFTs in the months to come. He believes that "Bitcoin ordinals will continue to take market share in the NFT space, in particular given the many Bitcoin L2s coming to the market."

However, the network activity on Ordinals and Runes has also declined in recent weeks. Runes transactions fell 88% from their highest point in June, and both Ordinals inscriptions and Runes have contributed less than 2 Bitcoin (BTC) per day in miner fees over the last week.

Despite the current slump, NFTs have bounced back before. In the last quarter of 2023, NFT sales tallied over $3 billion, including a $1.77 billion sales month in December 2023, the largest since the "NFT summer" started to dwindle in June 2022. This could signal a potential resurgence for the NFT market in the back half of 2024.