Daily trading volume on OpenSea, the largest non-fungible token (NFT) marketplace, has fallen dramatically from the $323 million peak in August to about $52 million Thursday, according to Dune Analytics.
The staggering drop could affirm thinking in some corners that the NFT market is a bubble that has popped. But several market observers say the market remains vibrant and far from finished.
“This doesn’t mean the NFT season is just over yet,” Ong Joo Kian, research analyst at Delphi Digital, wrote in a market commentary to clients. “There’s still a lot of attention on the space.”
Ong said that a few hyped projects such as Mutant Apes Yacht Club caused “a massive uptick” in NFT trading volume at the end of August and that a subsequent slowdown was not unexpected.
Others say the NFT market has merely hit a temporary plateau, as it looks for the next big project to generate more cash and new users.
“It’s possible we’re experiencing a top in certain NFT categories like PFP [profile pics] or avatar NFTs,” Messari Senior Research Analyst Mason Nystrom said. “But it only takes one new and exciting project to help the market reach a new top.”
But observers do not know what new NFT themes will spur a market resurgence. A number of recent projects have covered roughly the same ground.
The top NFTs by trading volume were Loot, CryptoPunks and Bored Ape Yacht Club, according to OpenSea, which is a secondary marketplace for bidding on and trading NFTs. The daily trading volume for CryptoPunks declined by more than 90%. The floor price for CryptoPunks, according to NFT Price Floor, is currently at around 90 ether, down from an August peak of 132 ether. Floor price refers to the lowest price of any NFT within a certain category (in this case, the CryptoPunk collection).
OpenSea logged record-high trading volume a month ago amid the launch of Pudgy Penguins and a slew of other popular NFT projects. The hype around these projects dramatically increased activity on OpenSea.
Delphi’s Ong said that as the Ethereum blockchain has become congested, some NFT activities have spilled over to other layer 1 blockchains such as Solana. That trend could consequently slow NFT growth on the Ethereum blockchain. OpenSea continues to rank first with over 1,560 ether ($5,467,148) for gas consumption to pay transaction fees on Ethereum over the past 24 hours, according to Dune Analytics.
“The NFT market will certainly continue to grow, [and] it’s just a matter of how fast and how volatile the growth will be,” Messari’s Nystrom said.
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