Here’s the big picture story of how the NFT market is really doing
Non-fungible token (NFT) trading volume and sales may have fallen in October. However, according to DappRadar’s findings, an 18% increase in monthly unique NFT trades shows that the market remains in “high demand”.
DappRadar reported that there were 1.11 million monthly unique NFT traders in October, up 18% from the roughly 950,000 traders there were in September.
This is true, despite revenues falling 30% to $6.13 million in October, while trading volumes fell 30% to $662 million – the lowest recorded in 2022.
“The increase in the number of unique traders indicates that new people are entering the NFT market and there is still strong demand.”
Travel month for NFT Market
For the NFT community, the month was very hectic. At least two other NFT marketplaces, Magic Eden in Solana and LooksRare in Ethereum, switched to an optional royalty scheme.
The survey also noted Yuga Labs’ continued dominance in the NFT industry, with CryptoPunks and Bored Ape Yacht Club accounting for seven of the top 10 sales for the month.
NFT trading volume rose to $2.71 billion in Q3 – a 67% increase from Q2 levels. The number of sales also increased from the 2nd quarter by 8.3%.
Compared to August, NFT trading volume increased by 10.4% in September alone. In addition, the sales figure increased by 21%, which shows the continued high demand for the NFT industry. On the other hand, the cryptocurrency market’s devaluation may have contributed to the overall decline in trading volume.
The analysis also showed that despite a 76% drop in NFT trade volume on Ethereum from Q2, there was a total of 11% more NFT trades. Despite a 96% increase from last month, Solana’s NFT trading volume was still down 63% from Q2.
The introduction of the y00ts collection, which gave Ethereum NFTs a run for their money, was what drove the expansion of the latter. Within a month of its introduction, it surpassed NFT giant OpenSea’s volume charts, generating 435,000 SOL or roughly $15 million in secondary sales.
More competition?
Since a few months ago, OpenSea’s rivals have expanded their market share, converting the “monopoly” market into an “oligopoly”. Although Ethereum- and Solana-based exchanges X2Y2 and Magic Eden have increased their market shares since 2022, OpenSea still dominates the sector in terms of users and volume.
Compared to August, OpenSea’s market share fell 8.3% in October, and its monthly NFT trading volume fell 12.1% ($313 million). Since July 2021, this is the lowest trading volume we have seen.
NFTs and their underlying marketplaces show strong signs of lasting despite volatility, although all markets are currently experiencing increased volatility.
With all the hype, more and more companies are considering NFTs as a means of raising capital. The flexibility of NFTs and their capacity to transfer verified ownership of a rare product on the blockchain is what makes them so attractive. However, companies should think about any regulatory restrictions that may limit the use of NFTs for fundraising before considering an NFT offering.
