Sales could fall below $1 billion for the first time in 2023
Abstract financial diagram of the bear market when stock prices go down
The Non-Fungible Tokens (NFT) industry has been a hub of innovation and growth over the past year, but as it approaches the midway point of 2023, the market is showing signs of maturation and change. According to a recent report by DappRadar, NFT sales could fall below $1 billion for the first time this year.
The NFT market in headwinds
According to the report, the NFT market is showing signs of a potential shift in May 2023, with trading volume reaching $333 million from $2.3 million in sales, a trend that could result in the first month of this year with trading volume below $1 billion dollars. .
Despite this decline in sales, the NFT industry continues to show strong activity and engagement, with daily unique active wallets (dUAW) linked to NFT activities reaching 173,000, marking a 27% increase from last month.
However, the NFT market is facing significant challenges, with many traders selling their large NFT holdings at a loss to participate in the Memecoin frenzy, according to DappRadar. This has led to an increase in activity on the chain, driving Ethereum’s gas fees to over $100 and negatively impacting the volume of low-value NFT trades on the blockchain.
Despite this, the NFT market still experiences significant development and events. Elon Musk’s tweet on May 10, 2023, referring to the Milady Maker collection, led to an increase in trading volume, reaching $13.95 million and doubling the number of trades in the same week.
In addition, the Pudgy Penguins project secured $9 million in seed funding, and debuted the Pudgy Toys collection, which amassed a combined trade volume of $7.89 million the following week.
Furthermore, the top ten NFT sales reveal stalwarts like Bored Ape Yacht Club and CryptoPunks dominating the NFT landscape. However, a new entrant has emerged in sixth position – an ADA handle, a personal crypto domain on the ADA blockchain, sold for $182,089, equivalent to 500,000 ADA.
Bitcoin Ordinals vs NFTs
Bitcoin Ordinals, a new form of digital asset, has become a hot topic in the decentralized app (dapp) community since it was launched by software engineer Casey Rodarmor on January 21. This protocol has gained a significant following, with over 7.4 million Ordinals minted at at the time of writing.
Ordinals differ from NFTs as they contain all their data directly on-chain, earning the label “digital artifacts”. This feature makes Ordinals a potential technical upgrade to NFTs and a shift in Bitcoin’s cultural landscape.
However, the emergence of Ordinals and the BRC-20 token standard, which enables the distribution of meme coins on the Bitcoin blockchain, has provoked concern among Bitcoin maxis. These innovations have strained the Bitcoin network, leading to a backlog of unconfirmed transactions and increased fees. The increase in transaction demand caused fees to rise to $31 on May 8, 2023, according to DappRadar’s report.
Despite the challenges, the increased activity has increased miner fees, improving the overall security of the Bitcoin blockchain. The increase in fees indicates an increasing number of people using Bitcoin for non-financial purposes, such as creating and trading Ordinals and speculating on tokens.
The Ordinals protocol has given rise to exciting collections and impressive sales, with Ordinal Punks and TwelveFold being notable examples. These collections have seen trading volumes in the last 30 days of 11.85 BTC and 14.9 BTC respectively, indicating significant interest and engagement in the new digital asset.
The introduction of Bitcoin Ordinals represents an exciting development in the NFT area, and opens up new opportunities for digital value creation and trading. However, it also highlights the need for continued innovation and upgrades to meet the challenges posed by increased activity and demand on the Bitcoin network.
Featured image from iStock, chart from TradingView.com
