After a dull period, NFT sales have taken a positive turn. What’s behind this momentum, and is it a sign of a sustainable rebound?
Table of contents
NFTs are finally making a comeback
Non-fungible tokens are starting to show signs of life again after a rather lackluster performance in recent weeks.
According to data from CryptoSlam, sales rose above $84.9 million between September 30 and October 6, marking the highest sales volume since the week ending August 25, which recorded more than $93 million.
What’s even more interesting is that the NFT market gained momentum in September. During the week of September 16-22, NFT sales were $69 million, and the following week, September 23-29, there was a modest increase to $75 million.
The current week, October 7, has already clocked more than $5.5 million in sales, suggesting the market could continue this upward trend.
In addition to the increase in sales volume, there has been an increase in activity, with more than 2 million transactions recorded in the last seven days as of October 7, an increase of 29.73% compared to the previous period.
However, it’s not all sunshine. The average sale price of NFTs has fallen 32.91% and is now around $43 per sale. This indicates that while more people are dabbling in NFTs, expensive collectibles may still be left behind.
With the numbers showing positive momentum, what is driving this rebound? Let’s take a deeper dive into which blockchains are leading the NFT race, why NFTs are making a comeback, and what we can expect in the coming days.
Which blockchains are leading the race?
As of October 9, Ethereum (ETH) still holds the crown as the dominant blockchain in the NFT space, but the landscape is changing and other platforms are quietly gaining ground.
Ethereum (ETH)
Ethereum continues to be the leader in NFT sales, raising over $26.5 million in the past week. Ethereum’s turnover represented almost 31% of the entire NFT market, but it is also plagued by a relatively high percentage of wash trading – around 11.69%.
Wash trading involves artificially inflating volume by buying and selling within the same pocket to create the illusion of higher demand.
Despite this, Ethereum’s massive user base and dominance in the NFT ecosystem cannot be ignored as it recorded over 136,000 buyers during this period.
However, the number of transactions (more than 654,000) indicates a growing dependence on smaller transactions, with the average sales price taking a sharp dive.
Mythos (MYTH)
Mythos (MYTH), a relatively newer player, is perhaps the most surprising competitor. Sales skyrocketed more than 6,200% last week alone, reaching $15.3 million, earning it the second spot.
This explosion is driven by its gaming-centric focus, tapping into a relatively untapped and highly passionate user base. In-game assets like NFTs are a concept that gamers are increasingly embracing, and Mythos is positioning itself as a leader in this niche.
What’s even more interesting is that this increase is not strongly linked to wash trading, as only 0.28% of trades are wash trades, showing that the platform is experiencing true user-driven growth.
Mythos has attracted more than 632,000 transactions this week alone, which is almost five times that of Ethereum, indicating that it could be a blockchain to keep a close eye on as it builds on this rapid adoption.
However, gaming NFTs are highly dependent on the success of the underlying games. So if these games fail to attract or retain users, the NFT market on Mythos could see a sharp decline.
Bitcoin (BTC)
Bitcoin (BTC) joining the NFT race was not something many expected a few years ago. Traditionally viewed as a store of value, Bitcoin’s blockchain was not designed with NFTs in mind.
However, the introduction of Ordinals has reinvigorated Bitcoin’s potential in this area. While the weekly sales volume of $14.1 million may seem modest compared to Ethereum, the fact that Bitcoin’s NFT market is growing organically, with only 5.15% wash trading, is worth noting.
Interestingly, despite having fewer transactions and users compared to Ethereum, Bitcoin has a higher average selling price, suggesting that the NFT market may be more focused on high-value, premium assets.
Solana (SOL)
Solana (SOL) remains a serious competitor, with sales of over $10.8 million this week, putting it in fourth place.
However, Solana’s wash rate is one of the highest among the top blockchains at a whopping 22.7%, indicating that while Solana is seeing growth, much of its activity may be artificially inflated.
Still, with nearly 223,000 unique weekly buyers and more than 421,000 weekly transactions, it’s clear that Solana remains a major player, especially among collectors who prefer faster and cheaper transaction fees than Ethereum offers.
Polygon (POL)
Polygon (POL), known for its efficiency and low transaction costs, posted revenues of more than $10.7 million last week, with wash trades making up just 0.25% of its transactions – far less than Ethereum or Solana.
Polygon also recorded an impressive 84,532 sellers, indicating that the blockchain is attracting a healthy level of market activity.
You might also like: From MATIC to POL: what does this crypto migration mean for you? Experts weigh in
Why are NFTs rising again?
The recent surge in NFT sales can be traced to a few key developments, the most notable being a high-profile, yet questionable CryptoPunk sale and Telegram’s introduction of innovative NFT features.
A flash loan-driven transaction involving CryptoPunk #1563 recently made headlines when it appeared to sell for an eye-watering $56.3 million on the Ethereum blockchain.
Bought Punk 1563 for 24,000 ETH ($56,292,000.00 USD) by 0x9cbb3d from 0xba1349. https://t.co/FqDvGZvg05 #cryptopunks #ethereum pic.twitter.com/hWimHKYb0x
— CryptoPunks Bot (@cryptopunksbot) October 3, 2024
At first glance, this seemed like a monumental sale in a space struggling with lower sales volumes and falling prices.
But a closer look revealed that the sale was anything but legitimate. The CryptoPunk buyer used a flash loan – an unsecured loan that is repaid in the same transaction – creating the illusion of a huge purchase.
3/ The progress:
Contract A contains Punk #1563, Contract B contains nothing.
Contract A mentions 24,000 ETH.
Contract B borrows 24,000 ETH from Balancer.
Contract B buys #1563. Contract B now has #1563, contract A has 24,000 ETH.
Contract A returns ETH to Balancer. pic.twitter.com/Clw1JGWASn
— Stop (@0xQuit) October 3, 2024
In reality, the Punk, which was purchased for just $69,000 in September, was simply transferred between wallets with no real money changing hands. Still, the sale turned heads and sparked conversations, renewing interest in the NFT space.
These carefully orchestrated events often capture the attention of investors, especially those who had withdrawn from the market amid the broader decline in NFT activity.
The psychological impact of this ‘selling’ can reignite the fear of missing out, drawing speculators back into the market on the expectation that increased attention could lead to real opportunities.
At the same time, Telegram’s move into the NFT arena has introduced a more accessible way for users to interact with digital collectibles.
On October 5, Telegram launched its new “Gifts” feature: animated images that can be sent to contacts on the platform. But what’s most exciting is that these gifts will be converted into NFTs later this year, with Telegram allowing users to list these limited-edition assets on the TON blockchain.
This feature builds on Telegram’s previous introduction of the in-app currency Stars, which users can spend on digital services within the platform. By linking NFTs to social interactions, Telegram makes NFTs more accessible to regular users.
Telegram’s integration of NFTs is a significant development due to its massive user base and the seamless experience it offers. Users will soon be able to convert these digital gifts into NFTs, trade them, and even auction them, all while remaining within the Telegram ecosystem.
While the broader market saw the lowest sales volume since January 2021 in September, these recent events have reinvigorated the sector. Whether this resurgence will last remains to be seen, but for now, NFTs are back in the spotlight.
What can you expect next?
Looking ahead, the NFT space is facing some uncertainties, especially with Wells’ recent notice by the U.S. Securities and Exchange Commission to OpenSea, the largest NFT marketplace.
On August 28, the SEC announced its intention to take enforcement action against OpenSea, alleging that some NFTs on the platform may qualify as securities. This could have major consequences for the entire NFT ecosystem.
A notice from Wells is a formal warning that the SEC could take legal action, and while OpenSea has the ability to respond, the looming threat creates an atmosphere of uncertainty.
If the SEC classifies certain NFTs as securities, it could trigger a wave of scrutiny not just for OpenSea, but for other platforms and NFT projects as well.
The potential for stricter regulation could make some investors hesitant and slow market growth, especially for projects where there is no clear legal framework.
At the same time, the current surge in NFT sales appears to be largely fueled by hype. It remains to be seen whether this buzz will translate into long-term growth or if it is just a short-lived trend.