The NFT market continues to struggle, according to figures from the latest DappRadar report. A confirmation of a worrying picture that is slowly beginning to crystallize. NFT trading volume fell 38% from Q1 to Q2. NFT sales also saw a 9.2% drop.
Trading volume refers to the total amount of currency (usually dollars) exchanged in a given period of time. Sales, a more obvious metric, refers to the number of NFT purchases (or transactions). Both figures taken together give a more accurate picture of the market situation.
And in this case it is not good. Looking at almost every metric, the NFT market has still not recovered to its pre-crash glory.
Number of NFT traders at record lows
According to data from Dune, the number of unique buyers and sellers in the NFT market has dropped into the hundreds and continues to fall.
For the last week Dune has data on, there were 366 buyers and 441 sellers. In the last week of June 2022, there were 31,353 sellers and 28,756 buyers. A drop of epic proportions.
The collapse of traders happened suddenly in early 2023, when the number fell by more than half within a week. In the second week of January there were 2385 sellers and 2388 buyers.
Source: Dune
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Unique Ethereum wallets trading NFTs tell an identical story. Not surprising since Ethereum is the dominant chain for NFTs. The question remains: how long can the industry explain away sustained contraction as a cyclical phenomenon?
The new(ish) king of NFT marketplaces, Blur, also saw a slowdown this quarter, with a 34% drop in trading volume. OpenSea, which had been the dominant marketplace for so long, was hit even harder, seeing its trading volume drop by more than 56%.
But even the most pessimistic observer will know that trajectories in this industry are rarely just “up” or “down”.
Bitcoin Ordinals One of the few winners
Unsurprisingly, the DappRadar report noted that Bitcoin Ordinals were among the quarter’s winners. Trading volume skyrocketed among the “Bitcoin NFTs”, going from $7.18 million in Q1 to an incredible $210.7 million in Q2. A whopping 2834% increase for the quarter.
The platform also saw an increase in all-time trades, to 554,215, and unique traders, totaling 150,969.
The arrival of Bitcoin Ordinals on the scene was one of the most significant innovations on the Bitcoin network in years. The innovation was made possible by the Taproot upgrade on November 14, 2021.
However, their popularity only took off this year thanks to community buzz and excitement about the potential of so-called “Bitcoin NFTs”. By the end of May 2023, the number of ordinal inscriptions had passed ten million, most of them in the previous month.