OpenSea trading tanks, down 99% since May
Has the NFT bubble popped?
What was once a red-hot market fueled by FOMO during the crypto bull market of 2021 is now just a trickle, with trading volume on the most popular NFT marketplace, OpenSea, down 99% in just under four months.
On May 1, OpenSea processed a record $2.7 billion in NFT transactions, but on Sunday, the marketplace only recorded $9.34 million worth, according to data compiled by DappRadar. The company registered 24,020 users on Sunday, about a third fewer than when it hit its record number of transactions in May.
The massive decline in volume in the NFT market has coincided with a sharp drop in crypto prices. The most popular cryptocurrency, Bitcoin, has fallen nearly 57% since the start of the year to $20,276. The second most popular cryptocurrency by market cap, Ethereum, has fallen about 59%, to $1,528, over the same period.
As trading volume and crypto prices have fallen during a period of decline that has been dubbed “crypto winter,” floor prices for the most popular NFT collections, which indicate the lowest price that an NFT in the collection sells for, have also plunged.
The floor price of the most popular NFT collection, Bored Ape Yacht Club, fell 53% to 72.4 Ether (about $110,000) as of Monday, from a peak of 153.7 Ether on April 30, according to CoinGecko. Another popular NFT pool, CryptoPunks, is down 19% from its peak in July.
After this story was first published, an OpenSea spokesperson said via email that the company disagreed with DappRadar’s methodology, noting that the 99% swing compared the site’s highest ever trading day to one of its lowest. Of the metric preferred by OpenSea – ETH volume, which leaves out the effect of the cryptocurrency’s price fluctuations – trading remains sharply down. By that measure, monthly volume fell 62% from May to July, and is on track to fall further in August, according to crypto-tracking platform Dune Analytics.
OpenSea, the spokesperson added, is not concerned about the decline in trade volume.
“We’re playing the long game because we’re seeing what’s possible, so we’re not too concerned about short-term volatility,” the spokesperson said. “We’ve always expected hype, hype and deflation as the community and use cases evolve, the technology becomes more sophisticated, and creators figure out how to build more utility into their projects.”
The crypto downturn has left many retail inventors reeling. A Pew Research Center study last week found that 46% of Americans who had invested in crypto said their investments had fallen short of expectations.
Although crypto has become increasingly prominent over the past year, Pew found that only 16% of US adults had invested in crypto, nearly the same number who said they had invested last September.
(This article has been updated to include comments from OpenSea.)
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