Non-fungible tokens (NFTs) had experienced a remarkable rise in the cryptocurrency world. The height of NFT excitement happened in the 2021/22 bullish period when the monthly trade volume reached nearly $2.8 billion in August 2021, creating a lot of excitement. These distinctive digital assets garnered widespread interest with million-dollar transactions making news.
Fast forward to July 2023, and the NFT market has experienced a dramatic transformation, with trading values plummeting. The buzz has waned, and a more sober reality has set in.
According to a recent Binance research report, NFT sales in the third quarter of 2023 hit a three-year low, reaching $299 million. The decline was attributed to falling Ethereum (ETH) prices and reduced floor prices for many NFT collections. September marked the worst month for NFT sales since January 2021, with floor prices of major collections like Azuki and Bored Ape Yacht Club (BAYC) plummeting over 25%.
Source: Binance Research
The statistics highlight the stark contrast from the NFT market's heyday. Gaming and metaverse-related NFTs suffered the most, with a drop of more than 40%.
Source: Binance Research
The average NFT sales price in September was $38.17, down significantly from the August 2021 peak of $791.84. Moreover, the number of daily unique NFT buyers decreased by 14% compared to the previous quarter, leaving just about 53,000 active buyers. Despite these challenges, Ethereum and Immutable, a layer-2 scaling solution, increased their market shares by 6% and 4%, respectively.
This quarter's top-selling blockchain games included Gods Unchained, Axie Infinity, NBA Top Shot, NFL All Day, and Mythical Beings.
This month, there was a spark of optimism as the NFT market displayed early signs of revival, particularly among blue-chip NFT projects. Data from Blur revealed encouraging trends, with floor prices rising in several blue-chip NFT series:
Source: Blocktempo
Among these, the Azuki series exhibited the most substantial increase. Furthermore, Azuki introduced the Azuki Passport and planned spontaneous events in five Asian regions, allowing collectors to collect stamps by purchasing event NFTs, even if they didn't actively participate.
On another note, the NFT trading aggregation platform Blur will end its Season 2 airdrop campaign on November 20, marking the end of this open-ended initiative after nine months since its launch. This initiative aims to airdrop 300 million BLUR tokens as rewards for the quarter. Whether this will reignite the interest of NFT investors in trading remains to be seen, making it an aspect worth monitoring.
The Season 1 reward airdrop, which ended in February, was a significant draw for NFT traders. Many eagerly engaged in bidding and listing items to improve their scores. The outcome was the distribution of up to 360 million $BLUR tokens to users, creators, and reward blind box holders based on the leaderboard rankings. This led to substantial wealth creation for those fortunate recipients.
Nonetheless, the revival of the NFT market remains uncertain, with questions lingering about whether the recent dip marks the bottom and a potential rebound. The NFT market's future prospects may hinge on the emergence of innovative and practical applications, sparking a new growth cycle.
As we navigate through this ever-evolving landscape, the significance of informed decision-making in the NFT market cannot be overstated. Despite the challenges, the potential for NFTs to reshape the digital landscape is very much in play.
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