It looks like the interest in the world of digital JPEGs has plummeted alongside the cryptocurrency market capitalization, the prices of crypto-related assets and major sectors like the Stablecoin and Decentralized Finance Sectors. Data from The Block Research reveals that a total volume of $12.22 billion was recorded in the second quarter of 2022. Compared to the first quarter, which recorded a volume of $33.88 billion, it means that the NFT sector’s trading volume has declined 63.93%.
The NFT market as with other sectors of the cryptocurrency market has been on a rollercoaster ride in 2022, especially in the second quarter. The heavy pressure from macroeconomic trends and the fallout from the Terra debacle have all played a factor in hindering the NFT sector’s performance and the crypto market as a whole. When compared to the slump seen in other sectors, the NFT sector’s volume decline is by far the worst.
During the second quarter, the prices of the top 20 cryptocurrencies by market capitalization have lost at least 30% of their value. In the same stead, we saw the DeFi Total Value Locked (TVL) lose 68.13% representing $155.79 billion in the second quarter of 2022. We all saw the trading volume of Decentralized Exchange (DEX) plummet by 38.6% compared to the first quarter. It is safe to say that the NFT market volume data shows a significant lack of interest in the sector compared to other sectors and indicators.
What you should know
- Looking closer at the trading volume recorded in the second quarter of 2022, the data proved to be more worrying as the interest in the digital JPEG space significant dropped in June, as it recorded transaction volumes of a little over a billion dollars.
- According to the data, June recorded a trading volume of $1.04 million. This is the lowest trading volume recorded since July 2021, when approximately $367 million in trading volume was recorded.
- Looking deeper, OpenSea accounted for most of the trading volume seen in the second quarter of 2022. The top NFT platform on the Ethereum Blockchain accounted for $6.79 billion of the total volume seen during the second quarter. This represents 55.54% of the total volume of transactions seen.
- Accounting for second and third place is LooksRare and Magic Eden NFT marketplaces which recorded $4.58 billion (37.52%) and $707 million (5.79%) respectively. The data shows that OpenSea and LooksRare both accounted for a majority of the transaction volume seen during the second quarter, representing approximately 93%.
- The month of April accounted for most of the trading volume seen as it recorded $7.18 billion, which represents approximately 59% of the trading volume seen during the quarter. Interestingly, comparing the trading volume recorded in May and June, it declined by approximately 74% as May recorded $4 billion in transaction volume.
- In the first half of the year, a total trading volume of $46.1 billion was recorded. When compared to the first half of 2021, where $953 million was recorded in trading volume, the NFT trading volume is still up over 4,700%. When compared to the second half of 2021, which recorded a trading volume of $14.91 billion, it is still up over 200%.
- The first quarter of 2022 still remains the best performing quarter for the NFT market as it recorded a transaction volume of $33.88 billion which when compared to the total volume recorded for the first 6 months of the year, represents 73.50% of the total trading volume.
- According to a report from DappRadar, it explained that looking at a broader timescale, the yearly performance of the market is “staggering.” It reads, “Overall trading volume and sales count are up by 533% and 59%, respectively, from Q2 of 2021. Although OpenSea is the premier NFT trading platform, its share has declined with the emergence of marketplaces like LooksRare, x2y2, and Solana’s Magic Eden.”
- DappRadar attributed the decline in the trading volume to the crop in the market value of cryptocurrencies. It reads, “The decline in trading can be attributed to the drop in the market value of cryptocurrencies and rising competition in the NFT trading landscape. However, while the marketplace’s volume measured in USD has fallen around 70% since May, the volume in ETH is down by 55% in the same timespan.”
- Despite the decline in the trading volume, DappRadar opined that the NFT market has responded uniquely to the bear trend. It explains that the NFT market capitalization in terms of ETH has been growing consistently to compensate for this decline. It reads, “It went from the low point of 3 million ETH in October to its peak in April, reaching 6 million ETH. Currently, the market cap is over 5 million ETH, an 8% drop since April but a 20% increase since May.”
- However, it is important to note that Since October, the price of Ether has declined approximately 68% from a little over $3,300 per token to end Q2 at a little over $1,000 per token.
The trading volume for ETH-based Metaverse NFT collections has increased by 101%, while Polygon collections have unfortunately declined by 26%. Overall, it has been a growth of 96%. Year-over-year, the stats look even more impressive as Ethereum-based collections have grown by 2093% while Polygon grew 456%, with an overall increase of 1999%.
While Blockchain games have been quite resistant to turbulence, the game-based NFTs have not had the same luck. The trading volumes have declined overall by 82%, with most chains suffering a pullback, the worst of which happened on Ronin by 84% and Ethereum, which lost 88%. The decline in the Ronin chain is as a result of the hack that saw over $600 million carted away.
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