NFT Frenzy Fizzles: Unique Buyers and Sellers Plummet Below 10k
Key Insights
- The number of unique NFT addresses has dropped below 10K.
- Sales of NFTs have also dropped outstandingly.
- A lack of interesting events in the NFT marketplace has been cited as a reason for this.
Is the NFT Era Coming to an End?
The number of unique addresses across marketplaces, such as OpenSea, LooksRare, and Blur, has remarkably diminished over the past couple of days.
At Blur, the sales have dropped to 5,688, its least in 90 days. Its daily unique users have fallen to 1,777, its least in 90 days also.
For OpenSea, the number of daily traders has plummeted to 10,640. Before now, its daily trader count hadn't gotten lower than 10,000, since July 2021.
Data from Dune reflects that the number of unique addresses across these marketplaces is down to below 10,000 users — approximately around 7,805 unique users — as of April 19. Unsurprisingly, it hadn't been this low since July 2021.
This is a far cry from the previous number of wallets the market used to have. Between Q1 2020 to Q3 2022, the number of unique wallets grew from 55,168 to 1,173,650, the highest being 1,948,934.
Also, the total number of sales has fallen to about 16,149 sales. The last time the number was reduced was in 2021, when it was 12,910 sales.
Barely two years ago, the market surpassed $40 billion, with the NFT "First 5000 Days" by Beeple setting the internet on fire. It then became the most expensive NFT globally with a worth of $69 million, with others having similarly expensive worths too.
The tech had a quick adoption rate from the Web3 community, with many users being onboarded. It also boasted impressive numbers early on, but now, it has seemingly gone up in flames.
What Caused the NFT Sales Drop?
The noteworthy drop in sales can be credited to several conditions, such as high gas fees, reduced interest for digital assets, or the bear market. Plus, some emerging coins seem more valuable right now, like $PEPE and CHAD.
SeaLaunch, an NFT research centre, opined,
Our thesis is that since there is a general decay in NFT users, it is most likely due to a macro scenario than to a change in the pattern of trading." They cited high gas prices and tax payment issues as probable reasons for this.
"Other scenarios may also have contributed to this, such as high-volume Blur airdrop farmers reducing the trading volumes and reducing liquidity, and the meme coin trading frenzy in the last days with coins such as PEPE," they added.
Blockchain analyst, Hildobby, had synonymous opinions.
I think it's a combination of factors, but the biggest factors are that nothing much interesting has been happening in NFTs lately, and rapidly rising gas prices are not helping.
The drop in both big and small traders, coupled with revenue decline, could make marketplaces struggle a lot.
Conclusion
The implications of the current activity in the market may be influenced by various factors. One possible factor contributing to the decline in activity is the backlash against it in some circles.
Critics argue that it is a speculative investment with no real value in the creative content they represent, while others are concerned about its environmental impact due to the significant energy requirements for its creation and maintenance.
It's important to note that it is still a relatively new technology, and there is much that remains unknown about its long-term potential. Although the recent drop in activity is concerning, it's premature to determine whether this represents a lasting trend or a temporary market fluctuation.
The decrease in unique buyers and sellers across all platforms is a cause for concern for those invested in this market. However, it's too early to make definitive conclusions about the future of NFTs. It's possible that this drop in activity is a temporary blip that could be reversed in the coming weeks and months.
Alternatively, it may signify a long-term trend that necessitates a significant shift in the perception and utilization of NFTs in the creative content marketplace.
