Although NFT trading volume is down when compared with the highs of January 2022, don’t worry—it’s not as bad as it seems. Mainstream media outlets don’t show the full picture; they fail to account for growth on other blockchains such as Solana and Polygon . And while NFT sales on Ethereum are down, blue chip collections are still doing well…
The Mainstream Media Loves to See NFTs Fail
Maybe it sounds harsh, but the media sentiment around the current NFT market seems almost jovial. The headlines speak for themselves:
- Is the NFT Craze Dying?
- NFT Trading Volume Plunges 97% Raising Questions About Their Future
- The NFT Market Is in Shambles
These articles all come from established, mainstream sources, yet they lack any real data to back up their claims. Yes, NFT trading volume is down when compared with the highs of January or even June and July, but that doesn’t mean the market is dying. In fact, if you take a closer look at the data, you’ll see that NFTs are down, but not out.
One of the considerations that is often overlooked is the fact that, at the end of the day, NFTs are major vehicles for speculation. With current trends in the larger global economy, NFTs are risk assets. No matter how you slice it, risk assets have taken (and will continue to take) a large hit. Yet, no matter the outlook in the macroeconomic environment, a Bored Ape NFT will still set you back about $100K USD.
So What Does the Data Say?
I’ve seen the number 97 pop up several times over the course of the last few weeks. The reason for this is because mainstream publications have repeatedly stated that NFT trading volume is down 97% from its 2022 highs.
Bloomberg uses a Dune Analytics dashboard that doesn’t exclude wash trading. Therefore, January’s volumes were effectively inflated by a factor of two or even three. In addition, their dashboard didn’t include other marketplaces such as X2Y2 and Magic Eden which currently account for 25% of daily volume. Consequently Punk9059 contends that volumes are down but that the number is closer to 85-90%.
The volume on Solana, for instance, was kickstarted by projects such as y00ts , ABC , and other collections. In an article by Blockworks, Solana’s market share of the total trading volume rose from 7% to 24% in the last six weeks. There were also multiple days in September where Solana had higher trading volume than Ethereum. Finally, the number of unique buyers increased by 34% month over month, according to data from Dune Analytics.
It’s Not Over Yet…
While I don’t see a flippening of ETH by Solana in terms of NFT volume, I do think that the NFT market is becoming more diverse with collectors and traders interacting with different blockchains. How this will change the landscape in the future remains to be seen, but the data that traditional media relies on for their clickbait articles is extremely messy and simply doesn’t include all the facts.
What do you think about the current NFT market? Is everything done for? Or will NFTs make a massive resurgence? Let us know your thoughts!