The latest report from DappRadar reveals a concerning trend in the NFT market, with trading volume and sales experiencing a significant drop. The report highlights a 38% decrease in NFT trading volume from the first quarter to the second quarter, while NFT sales saw a decline of 9.2%. These figures paint a worrying picture, indicating that the NFT market is yet to recover its previous levels of success.
Decline in Number of NFT Traders:
Data from Dune showcases an unprecedented decline in the number of unique buyers and sellers in the NFT market. The figures reveal that the current count of traders is in the lower hundreds and continuing to decrease. For instance, in the last week analyzed by Dune, there were only 366 buyers and 441 sellers. In comparison, during the last week of June 2022, there were 31,353 sellers and 28,756 buyers—an enormous drop. This collapse in trader numbers occurred rapidly in early 2023, with the count decreasing by over half within a week. By the second week of January, there were only 2,385 sellers and 2,388 buyers.
Impact on NFT Marketplaces:
The impact of the struggling NFT market is evident across various marketplaces. Blur, which emerged as a new major player, experienced a 34% drop in trading volume during the quarter. Even OpenSea, which had long been the dominant marketplace, faced a more significant setback with a trading volume decline of over 56%. These numbers highlight the challenges faced by both established and emerging NFT marketplaces.
Bitcoin Ordinals as an Exception:
Amidst the downturn, one notable exception is the success of Bitcoin Ordinals. The DappRadar report reveals that trading volume for “Bitcoin NFTs” skyrocketed from $7.18 million in Q1 to an incredible $210.7 million in Q2, representing a remarkable 2,834% increase for the quarter. Bitcoin Ordinals also experienced a surge in all-time trades, reaching 554,215, and attracted 150,969 unique traders. The introduction of Bitcoin Ordinals, made possible by the Taproot upgrade in November 2021, garnered significant attention and excitement within the community, propelling their popularity throughout the year. By the end of May 2023, the number of ordinal inscriptions surpassed ten million, with the majority created in the previous month.
The NFT market faces ongoing challenges as trading volume and sales continue to decline. The substantial drop in the number of NFT traders is a cause for concern, suggesting a sustained contraction rather than a cyclical phenomenon. While established marketplaces like OpenSea and newer platforms like Blur have experienced setbacks, the success of Bitcoin Ordinals stands out as a bright spot in an otherwise struggling market. As the NFT industry navigates these challenges, it will be crucial to assess and adapt to changing market dynamics, seeking innovative approaches to reignite growth and regain momentum.