Here’s why sales volumes for Ethereum and Polygon NFT could increase in Q3 despite Q2’s poor performance
The niche for non-fungible tokens (NFTs) had a characteristic boom towards the end of 2020, and continued to become a $ 41 billion industry by the end of 2021, according to Chainalysis’ updated data. The hype surrounding these tokens attracted a lot thanks to the influence of high-profile characters and popular brands that showed interest. This rapid increase in buyers and sellers consequently led to highly reported sales volumes during the 12-month period.
Worth mentioning, the $ 41 billion figure was taken as an estimate, and The Financial Times reported that the actual valuation of the industry would be greater if sales of digital collectibles minted on other blockchains in addition to the dominant Ethereum were considered. On the way into the year, the niche received boosterism from several analysts who believed that NFTs would be a crucial element in the metaverse.
Reasonably many expected that the NFT industry would rise to a new record value this year after the impressive performance in 2021. Despite generally positive feelings from artists and top celebrities, this asset class has also fallen in line with the rest of digital assets. Reported sales figures over the last half dozen months indicate that the hype surrounding NFTs is almost certainly dead at this point.
NFTs had a bad run in June
In particular, the majority of NFT marketplaces have reported shrinking NFT sales volumes this year, especially in the last quarter, Q2. Dune Analytics data shows that daily NFT sales in major marketplaces have fallen steadily since the beginning of May, when the daily sales volume on OpenSea soared to $ 543.78 billion on 1 May.
In addition, the number of NFT transactions per day fell for most of June, reaching a monthly low of 697,516 on 20 June. This transaction volume seemed to pick up again in the last week of the month, but failed to cut over 1 million before the end of June. The number of daily sellers and buyers also remained low through June, except for occasional sharp peaks and falls.
As further illustrating June’s poor performance, the NFT transaction figures for various marketplaces also tracked a falling curve.
Ethereum, Polygon and Solana NFT sales data for June
CryptoSlam data on Solana NFT sales volume show that the number of daily sales and unique buyers fell in the first half of the month before falling short and resuming the downward trend in the last week of June. This was also the case for Ethereum. The number of unique buyers engaged in NFTs characterized by the leading chain by market share consistently fell throughout the month, as did the daily sales volume.
OpenSea’s monthly sales volume of Ethereum NFT in June was $ 696.63 million for 1.543 million NFT pieces. For correlation, the corresponding figures for May and April are $ 2.596 billion and $ 3.487 billion, respectively. Last month’s volume is the lowest ever recorded since July 2021. The number of active users who performed at least one NFT on the platform also fell for the second month in a row in June.
The interaction with Polygon NFTs on the market was significantly lower, according to data from Dune Analytics.
Expectations for Q3
In addition to the propensity for NFTs, the general decline in sales volume in June was partly affected by the situation in the crypto market. Some industry experts argue that the absence of strong demand in the secondary market may also have played a role. That said, the market may look less gloomy in the second half of the year.
The growing involvement of (and hence the support of) major technology companies such as Meta may change the current tide. The social networking giant recently announced that it is now testing Ethereum and Polygon NFTs on Facebook after successful NFT integration on Instagram.
To learn more visit our guides on investing in Ethereum or Polygon.
