The non-fungible tokens (NFTs) niche enjoyed a characteristic boom towards the end of 2020, going on to become a $41 billion industry by the end of 2021, as per Chainalysis’ updated data. The hype around these tokens drew in many thanks to influence from high-profile figures and popular brands showing interest. This rapid increase of buyers and sellers consequently drove reported sales volume high across the 12-month period.
Worth mentioning, the $41 billion figure was taken as an estimate, with The Financial Times reporting that the actual valuation of the industry would be greater if sales for digital collectibles minted on other blockchains besides the dominant Ethereum were considered. Heading into the year, the niche got boosterism from several analysts who opined that NFTs would be a crucial element of the metaverse.
Reasonably many expected the NFT industry to rise to a new record valuation this year following the impressive performance in 2021. Despite receiving generally positive sentiment from artists and top celebrities, this asset class has also fallen in line with the rest of digital assets. Reported sales figures over the last half a dozen months indicate that the hype around NFTs is almost certainly dead at this point.
NFTs had a poor run in June
Notably, the majority of NFT marketplaces have reported shrinking NFT sales volumes this year, especially in the last quarter, Q2. Dune Analytics data shows that daily NFT sales on major marketplaces have been declining consistently since the start of May, when the daily sales volume on OpenSea skyrocketed to $543.78 billion on May 1.
In addition, the number of NFT transactions per day fell for the greater part of June, reaching a monthly low of 697,516 on June 20. This transaction volume appeared to recover in the last week of the month but failed to cut above 1 million before the end of June. The number of daily sellers and buyers also remained low across June except for occasional sharp spikes and falls.
Further illustrating June’s poor performance, the NFT transaction count for different marketplace also traced a falling curve.
Ethereum, Polygon and Solana NFT sales data for June
CryptoSlam data on Solana NFT sales volume shows that the number of daily sales and unique buyers fell for the first half of the month before recovering briefly and resuming the downtrend in the last week of June. This was also the case for Ethereum. The number of unique buyers dabbling with NFTs minted on the leading chain by market share consistently fell throughout the month, as did the daily sales volume.
OpenSea’s monthly sales volume of Ethereum NFT in June was $696.630 million for 1.543 million NFT pieces. For context, the equivalent figure for May and April are $2.596 billion and $3.487 billion, respectively. Last month’s volume is the lowest ever recorded since July 2021. The number of active users who transacted at least one NFT on the platform also fell for the second consecutive month in June.
Interaction with Polygon NFTs on the marketplace was significantly lower, Dune Analytics data shows.
Expectations for Q3
Besides the inclination away from NFTs, the general decline in sales volume in June was partially influenced by the situation in the crypto market. Some industry experts argue that the absence of a strong secondary market demand may have also played a part. That said, the market could look less gloomy in the second half of the year.
The increasing involvement of (and thereof associated backing from) major tech firms like Meta might change the current tides. The social networking giant recently announced it is now testing Ethereum and Polygon NFTs on Facebook after successful NFT integration on Instagram.
To learn more visit our guides on Investing in Ethereum or Polygon.
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