4 mins readIn August, Ethereum NFT trading dropped. This was the lowest level in two years. Big NFT markets like OpenSea, Blur, LooksRare, and X2Y2 saw this. The Block’s dashboard showed the data. Ethereum NFTs traded less in August.
The figure fell to $407 million. This was a 32% decrease. It was less than July's $599 million. It was the smallest volume since last June.
Source: The Block, updated September 3, 2023
X2Y2 Sees the Big Drop
X2Y2's trading dipped the most. It saw a 40% drop in one month. Other markets like Blur, OpenSea, and LooksRare traded less too. They decreased by 38%, 18%, and 8% respectively.
Once dominant, OpenSea also experienced a drop. It saw fewer active users. According to Dune Analytics, OpenSea users fell by 12%. This brought the count down to 126,000. That's the smallest since last July.
OpenSea monthly active users. Source: Dune Analytics
Drop Reflects Less Interest in Ethereum NFT
This drop shows a declining interest. People are less interested in Ethereum NFT trading. This happened since the NFT market peaked in 2021.
This is especially true when compared to the entire crypto market. It's shown by the Bitwise Index. This index includes major NFT collections.
It includes CryptoPunks, Azuki, Bored Ape Yacht Club, and DeGods. It fell by 37% since the start of the year. Meanwhile, the price of Ether rose. Ether is the crypto used for NFT transactions. Its price grew by 37%.
Solana and Regulation Impacts
Solana, another blockchain, faced similar things. It is known for trading and minting NFTs. Its daily trading volume dropped below $1 million. This was a first since last September. NFTs also faced regulatory scrutiny. The U.S. Securities and Exchange Commission is involved now.
Source: The Block, updated September 3, 2023
This commission started its first action related to NFTs. For this, it targeted the podcast studio Impact Theory.
Indeed, regulators are watching the NFT market. This could mean more rules. NFT platforms might face challenges. The NFT sector is already in trouble. Just look at Recur. It was an NFT platform. It shut down recently.
This occurred less than two years after it raised $50 million. This was part of a Series A funding round.
NFT Market Faces Distress
Continuing on, Rarible made a major decision. It stopped taking NFT orders. The orders were from OpenSea, LooksRare, and X2Y2. This decision was not isolated. It relates to a big debate in the crypto world. The debate is about creator royalties. More platforms are choosing to stop enforcing these. NFT royalties have dropped dramatically. They are at their lowest volume in two years.
But it's not all gloom. There could be light for the NFT market. The help might come from the gaming sector. Loopify thinks so. This organization is an expert in the metaverse. NFT studio Endless Clouds also agrees. There needs to be a change of focus.
Right now, NFTs for profile pictures dominate. The future must look different. In-game items, like "skins", should be represented by NFTs.
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Including NFTs into gaming could help. It could revive the NFT ecosystem. There has been quite a drop in the NFT market. It hit its lowest point in two years. This drop is clear on big Ethereum NFT marketplaces. There's been a decline of interest since 2021.
Takeaway
Actions by regulators explain a lot. The closing of NFT platforms also does.
These show the challenges NFT face. But there's potential good news. NFTs in gaming could offer hope. This could revive the NFT market. NFT spaces keep changing. We must watch these changes. They will affect the long-term health and growth of NFT.
