The month of October 2023 saw a reversal in the downward trend of the Web3 industry since the end of last year. It is a sign that the sector has reached rock bottom, and we are at the cusp of a bull run. The NFT sector has had a particularly bad run for most of 2023. However, that is now changing.
The Fall and Rise of NFTs In 2023
The NFT experienced a massive surge in 2021 that peaked in January 2022, when monthly trading volume was at $5.8 billion. However, over the next few months, the volume gradually went down. In September 2023, a study by dappGambl found that out of the 73,257 NFT collections in their study, around 95% of them lost all their value and were worth zero ether. It also revealed that less than 1% of the NFTs in their study were worth over $6000, compared to the millions in valuation two years prior.
At the peak of the NFT rally, everyone, including leading brands and renowned celebrities, was getting in on NFTs. For most of 2023, those projects have quietly gone away. However, that could soon change as the NFT sector roars once more.
The Trend Is Reversing
Trading volume for the NFT sector is up to $405 million from $306 million, nearing the volumes seen in August 2023 of around $408 million. However, total sales are still down by 5%. Ethereum remains a leader, with trading volumes jumping 50% on the network.
A blockchain worth noting is Immutable X, which has seen $22 million in trading volumes for the month. Its most popular NFT-based games are Gods Unchained, Illuvium, and Cross the Ages, which have helped to drive up interest in NFT gaming.
Other chains have also seen a drop in sales volume in the same month. For instance, Starkware, Polygon, and Flow have seen sales volumes drop to 42%, 48%, and 32% respectively.
One blockchain that has performed quite well in the month is Solana. The project, including its SOL token, saw a major drop in interest following the collapse of FTX. In October, NFT trading volume rose 15% from $24 million to $27.6 million. zkSync Era, a relatively new ecosystem, saw trading volume rise 88% from $7.3 million to $14 million in trading volumes for the month.
Top Three NFT Collections in October
According to DappRadar, the top NFT collection is Bored Ape Yacht Club. The collection saw sales volume rise by 53% in October 2023. BAYC volumes stood at $54 million, which also saw a 46% rise in unique traders.
Mutant Ape Yacht Club, also from Yuga Labs, also performed well in October. The collection saw an 11% drop in sales volume and total sales number, while the unique traders’ count remained stable. In third place is Gods Unchained, the trading cards game. Sales volume was up 10%, while the unique traders count rose by 19%.
The Future of NFTs
While the industry is in a major slump right now, that could change in the next few months. There is a lot of innovation going on despite the slump. For instance, there is the ERC-6551 standard revealed in July 2023, which assigns every NFT a smart contract account. Additionally, OpenSea released a new feature called Deal in July 2023, which allows peer-to-peer NFT swapping. These innovations, and many others, will cumulatively transform the sector into more than just a buy-and-hold industry.
Market Forecast
According to Statista, the NFT market will grow to $3.2 billion in 2027, representing a CAGR of 18.55%. Additionally, the total user base is projected at 19.31 million by 2027. A growing community coupled with innovation bodes well for the future of NFTs.
Should You Buy NFTs?
While there is a consensus that the sector is unlikely to experience a bull run similar to the 2021 event, the market could undergo a revival in 2024. Utility and value-based projects, collaborations, and real-world applications will be the likely drivers on the next NFT Bull Run. Consequently, anyone looking to invest in NFTs should seek out projects with those qualities. However, as with any crypto investment, NFTs are prone to severe fluctuations, and one should only invest what they can afford to lose.
Disclaimer: This website provides information about cryptocurrency and stock market investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for educational and informational purposes only. The owner of this website is not a registered investment advisor and does not offer investment advice. You, the reader / viewer, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment.
One thought on “Non-Fungible Token (NFT) Market Trends”
Comments are closed.