• Ether, Solana NFT Markets Cool Down After Late Summer Surge

  • The NFT market reached a new peak in August, when OpenSea, which includes the ethereum-centric marketplace, traded more than $3.4 billion in that month, a 950 percent increase over July and more than 140 times the total volume for all of 2020. However, the momentum of the broader market has eased off so far in September.

    The data shows a sharp drop in NFT trading volume over the past week or so as the top markets have cooled and leading collections like CryptoPunks and Art Blocks have seen noticeable movement.

    Current market activity remains well above the early summer chill, but the recent downturn may indicate that enthusiasm for expensive digital collectibles is waning, especially amid surging ethereum trading fees and sinking values for major cryptocurrencies.

    Last weekend, OpenSea recorded a combined volume of nearly $107 million worth of Ether transactions on Saturday and Sunday, according to Dune Analytics. By comparison, the previous weekend, September 4-5, saw $274 million in transactions during the same time frame.

    OpenSea’s daily trading volume on Ether averaged about $84 million in value over the past week. The cryptocurrency market has also fallen extensively over the past seven days, with CoinGecko showing an 18 percent drop in the price of ethereum and nearly 14 percent in bitcoin.

    August 21 marked the first time OpenSea amassed more than $100 million in trading volume in a single day, and it began a streak of such days that lasted until September 7. OpenSea set its current single-day record of nearly $323 million in ethereum trading volume on August 29.

    The market currently has over $1.46 billion worth of Ether trading volume so far in September. That’s still well above OpenSea’s record total for January through July of this year (about $959 million in total.) OpenSea needs to average more than $115 million in daily volume for the rest of the month to break its towering monthly record for August.

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    NFTs act like ownership deeds for digital items, with popular NFT collections taking the form of random profile pictures, sports video highlights, generated artwork, and interactive video game items. Other use cases are possible, such as NFTs representing event tickets, musical compositions, or physical ownership.

    Leading NFT collectibles have likewise seen a significant drop in the past week. According to CryptoSlam, trading volume for Axie Infinity, an ethereum-based game, has dropped 10 percent in the past seven days, while CryptoPunks, the leading profile picture project, has dropped 51 percent in the same time frame. Both series are traded on their own custom platforms outside of secondary marketplaces such as OpenSea.

    Similarly, other ethereum-based projects have also declined over the past week, including Bored Ape Yacht Club (62 percent), Loot (89 percent) and Art Blocks (78 percent), according to OpenSea. The average selling price of each of these projects has also fallen in the last week. Meanwhile, Solanalysis shows that the 7-day trading volume of NFTs minted on the Solana blockchain has dropped by 18% compared to the previous period.

    The broader NFT market swelled at the start of 2021, generating $2.5 billion worth of transactions in the first half of the year, although the momentum and buzz around NFT seemed to ease in the late spring and early summer. Activity surged again in late July and throughout August, driving many popular NFT projects and markets to new peaks.

    While the market has largely moderated from its late August peak, it is hardly doom and gloom. Individual NFTs, for example, are still generating sizable amounts. On Sunday, a CryptoPunk sold for 2,000 ETH ($6.6 million), and last week, a Bored Ape Yacht Club NFT sold for 740 ETH ($2.9 million) to the makers of The Sandbox, an ethereum-based game. Last week, an NFT from the popular Art Blocks Fidenza project also sold for 437.5 ETH ($1.56 million).

    Over the weekend, an NFT of Degenerate Ape Academy sold for 5,980 SOL ($1.1 million) – the largest Solana-based NFT sale to date. Also last week, a batch of 101 Bored Ape Yacht Club avatar NFTs sold at Sotheby’s for over $24 million.

    On Ether and Solana, anecdotal evidence suggests that select NFTs from top-tier collectibles can still fetch big prices. However, entry-level (or bottom) prices are dropping, even for popular items, while less in-demand or lower-quality items are losing momentum, leading to a significant drop in overall transaction volume.

    That said, new collections are still declining and accumulating significant transaction volume. According to OpenSea, Gremplin’s CrypToadz has amassed $17.7 million worth of ETH since its launch last week, while Sneaky Vampire Syndicate has generated more than $12.5 million in volume since its debut yesterday. Both are Ethereum-based projects.

    Meanwhile, NFT artwork platform Foundation is on track to surpass its August volume of $17.5 million, generating $9.1 million in volume so far in September, according to Dune Analytics.

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