Published: October 5th, 2022
While overall NFT sales volume stayed largely flat in September, there have been some highlights. Numbers from DappRadar show that high-value Ethereum NFTs are doing a steady trade, and demand for Solana NFTs is gaining pace.
The firm tracked USD 945 million in overall NFT trading volume in September, a figure that excludes suspected wash trades. That’s up from August’s figure of USD 925 million and USD 914 million in July.
Trending positive, yet the NFT market hasn’t cracked the USD one billion mark since June and remains in the doldrums when compared to the frenzy of late 2021 / early 2022. In January, for example, DappRadar says the market reached roughly USD 5.4 billion in organic NFT trading volume. That means volumes dropped by 80 per cent or more from January to September.
In a note accompanying the research, DappRadar said there were a few possible reasons for the ongoing NFT market slump. Crypto prices have fallen sharply in 2022, with Ethereum (ETH) sinking by 65 per cent since January. Geopolitical upheaval and broader macroeconomic trends have sunk both crypto and traditional financial markets, making investors more risk-averse.
The result is a pool of buyers less willing to have a go with the latest trendy digital asset. That said, NFTs are still selling by the millions, and there are signs of a recent resurgence. Close to 8.8 million NFTs traded hands in September, up from 7.7 million in August and 5.7 million in July. That marks the third-largest monthly total for the 2022 year-to-date, though January remains the high water mark with 12.11 million NFTs sold.
‘Demand for NFTs hasn't disappeared by any means,’ DappRadar said. ‘We believe the market is finding its level where NFTs are concerned, walking back a bit from the bubble that had formed around some high-profile collections that generated million-dollar sales.’
DappRadar noted another interesting trend. Solana NFT sales have seen a minor liftoff in recent weeks on the back of successful projects like ABC and y00ts. DappRadar said it tracked close to USD 130 million in Solana NFT sales last month, nearly twice the USD 68 million seen in August.
The firm’s data also suggests that OpenSea’s grip on the NFT market is beginning to fade. Though it's still the leading NFT market, posting USD 350 million in trading volume last month, upstart marketplace X2Y2 was closing in fast with USD 296 million in trading volume. Top Solana marketplace Magic Eden saw USD 127 million in September trading volume.
There have also been a few high-profile and high-price sales happening, suggesting there still may be life in the market.
The latest generative art drop from NFT innovator Tyler Hobbs on September 28th pulled in close to USD 17 million in primary sales, while secondary sales reached USD 27 million in the past four days. Over the weekend, a single CryptoPunks NFT, meanwhile, commanded USD 4.5 million on the secondary market.
Looking ahead at likely prospects for the NFT market over the next six months, DappRadar said that the days of five- or six-billion-dollar monthly sales totals won’t be back anytime soon. The original speculative bubble around NFTs has popped.
But the firm does believe that the market will grow again, potentially moving back into the USD 2 billion monthly sales range if broader economic trends improve.
One potential growth driver is the rise in NFT activity by household brand names like Starbucks and Ticketmaster, plus the potential for another spike in adoption if the nascent NFT gaming space finds traction.
'The potential for new market activity arising from NFT games could be massive,’ the firm says. 'In as little as twelve months we could see a completely different NFT market driven by the buzz around certain NFT gaming assets.’
An NFT (or non-fungible token) is an electronic proof of ownership for an object or asset. In the main they’ve been used to provide representations of digital goods like profile pictures, artworks, and other collectibles. Last year the buzzing NFT market accumulated USD 25 billion in trading volume. The data from DappRadar shows that this year has been a different kettle of fish.
The market for non-fungible tokens has been subject to the same tumult as the wider crypto market, with no digital asset escaping 2022’s descent into bear territory. That’s seen some notable ups amid the longer-term downtrend.
In mid-March the CryptoPunks NFT collection posted a 1,200 per cent jump on secondary markets over a matter of days. Project owner Larva Labs triggered the surge when it announced that it was selling the IP for the collection to Yuga Labs, makers of the hugely successful Bored Ape Yacht Club Ethereum NFT collection.
A raft of newbie NFT enthusiasts rushed-in to the market clutching dreams of additional gains for their NFT holdings. Since Yuga Labs had turned the Bored Ape Yacht Club into a small fortune in less than a year, perhaps they’d work the same magic for CryptoPunks?
Then over the Easter weekend in April, the much-anticipated launch of the Moonbirds project happened. It was minted on Saturday the 16th. By Easter Monday, the Ethereum NFT collection from tech wunderkind Kevin Rose had tallied more than USD 280 million in sales.
OpenSea scored its biggest one-day trading volume figure ever off the back of the launch, hitting USD 175 million in Ethereum trading.
April also saw the American National basketball Association (NBA) step into the NFT game with the launch of a new dedicated Twitter feed called NBAxNFT, which aimed to highlight where ‘basketball intersects with Web3, including the metaverse, gaming, and of course NFTs.’
As part of that launch, the league developed a Discord server and quickly hoovered up more than 30,000 members. It also announced plans to drop a collection of Ethereum NFTs themed to the 2022 season basketball season playoffs.