The NFT market fails to reach $1 billion in trades for the first time since June 2021
The NFT market for the past 4 months has been on a bearish trend as many have suggested that the sector in the cryptocurrency space has lost its appeal, due to the current crypto winter which has seen massive selling from a majority of the crypto assets we have seen today. Due to the lack of interest and investment flowing into the space, data from DappRadar reveals that NFT transaction volume did not reach $1 billion, when it recorded approximately $900 million, in July 2022. The last time this happened was June 2021.
It is no news that the NFT market is facing a historically bearish period. Liquidity is low, prices are heavily influenced by the decline in the value of cryptocurrencies, and the potential profit from resale is not very high. As a result, many users have decided to liquidate their investments in the NFT market, wait for better times or move to positions known as “holding”, trading blocks until the “crypto winter” has passed.
The measured trading volumes showed that the market is shrinking, with a decrease of 25% MoM. The number of traders has also decreased by 8% MoM, but still up 40% as of July 2021. The market is mainly dominated by the four projects owned by Yuga Labs: CryptoPunks, Bored Ape Yacht Club, Mutant Ape Yacht Club, and Otherdeed for OtherSide, which alone represents more than $160 million in sales in July. In other words, Yuga Labs represents just over 20% of the entire NFT market during July 2022 total trading volume.
What you should know
- Recent trends have enabled the explosion of tools, mainly Ethereum Name Service domain names, with $20 million in total trading volume in the last 30 days.
- Most Bored Ape Yacht Club members have started purchasing the four-digit domain name that corresponds to the Ape they own. This number roughly matches the domain name of the brand that your Ape has.
- In these bear market times, where trading is concentrated in one asset class, the report explained that there is a hyper-centralization of activity as blue-chip NFT collections retain most of their value.
- Despite the decline in NFT trading volumes, NFT Marketplaces have continued to expand despite the market downturn. We are witnessing the emergence of two new marketplaces: GameStop NFT Marketplace, which debuted on July 11, 2022, and Nickelodeon’s NFT Marketplace, which launched on July 19, 2022.
- GameStop NFT Marketplace is a non-custodial marketplace built on Ethereum Layer-2 based blockchain technology known as the Loopring Layer-2 scaling solution. In its first two days of operation, the GameStop NFT marketplace outperformed the Coinbase NFT marketplace. Since its launch, the total trade volume for the top 50 collections is approximately $12 million. CYBER CREW [C4] collection is the leader in sales volume, with 3000 ETH.
- The launch of Nickelodeon’s NFT marketplace has also been a huge success; it witnessed over $2 million in total volume in less than three weeks. The marketplace is now exclusively selling the first drop of Nickelodeon NFTs,”Nickelodeon: Rugrats & Hey Arnold!” which has done more than 1,700 ETH ($2.89 million) in total volume via OpenSea, the leading NFT marketplace in the industry. The collection sold out in less than ten minutes during the pre-sale and the general sale. The retail price was $50, and the collection’s floor price is currently $94.
- While the entry of new competitors has made things more difficult, OpenSea remains the dominant marketplace, although its market share has fallen from 84% in May to the current 58.6% measured in July.
- OpenSea’s dominance has undoubtedly waned as the NFT market matures and becomes more competitive, with volume increasing in X2Y2, Solana’s Magic Eden and Ethereum’s Foundation, which focuses on NFT artwork. Despite this, it is safe to say that OpenSea’s presence will remain dominant for months to come.
- The report also reveals that the gaming sector is defying the bear market trend with nearly 1 million daily Unique Active Wallets (UAW) and $857 million in transactions. The report explained that the best blockchain games retain their player base, demonstrating real engagement at the top of the charts.
- Metaverse and blockchain-based gaming ventures continue to raise increasing venture capital. It is worth mentioning that the dominance of games for UAW has increased from 52% to 57.39% MoM, a very bullish trend for this category.
Although the NFT market failed to reach a billion in transaction volume by July 2022, there are still some advantages when it comes to gaming, metaverse and building the ecosystem. According to the report, it states, “However, crypto, NFT and web3 are still functional and will remain so. This crisis can be seen as a rapid market recalibration that has eliminated harmful “ponzinomics” ventures that would not have stood the test of time. It’s time to stay strong and build. The projects that succeed will create the basis for an excellent bull run.”
