The monthly trading volume for tokens based on the Bitcoin Ordinals protocol has dropped by more than 97% since May 2023.
Ordinals offer the unique proposition to generate fungible (BRC-20s) and non-fungible tokens (NFTs) on the Bitcoin blockchain. These assets have exploded in popularity in the second quarter of this year. Trading volume peaked at $452 million in May, but has declined rapidly since then, according to a report from DappRadar.
In June, Ordinals trading volume fell 76.5% to $106 million, the report said. July and August saw a complete reversal of May’s trading fervor. July trading volume fell 66.9% month over month to $35 million. Current data, from mid-August, shows a volume of just $3 million. This represents a drop of more than 97% since the all-time high in May.
Trading volume is an indicator of market strength. This volume decline can be interpreted as a signal of declining market interest in Ordinals.
“The drop raises crucial questions about the future of NFTs on the Bitcoin blockchain,” the report said.
Declining UAW participation
According to the DappRadar report, at the peak of market interest in May, there were 79,261 unique active wallets (UAW) participating in the Ordinals market. This has fallen to just 6,708 in August. DappRadar describes their UAW data as a metric that measures the number of unique wallet addresses interacting with Ordinals.
The Ordinals protocol first gained prominence earlier this year, allowing tokens and NFTs to be created on Bitcoin and sparking an increase in transactions and fees on the network.