NFT Market Shrivels in Q2 as Number of Traders Dwindles

The NFT market is continuing to struggle, according to figures from the latest DappRadar report. Confirming a worrying picture that is slowly beginning to crystallize. NFT trading volume dropped 38% from Q1 to Q2. NFT sales also saw a 9.2% decrease.

Trading volume refers to the total amount of currency (usually dollars) exchanged within a particular period. Sales, a more obvious metric, refers to the number of NFT purchases (or trades). Both figures together give a more accurate picture of the state of the market.

And in this case, it isn’t good. Looking at almost any metric, the NFT market still has not recovered to its pre-crash glory.

Number of NFT Traders at Unprecedented Lows

According to data from Dune, the number of unique buyers and sellers in the NFT market is down in the lower hundreds and continuing to decline.

For the last week that Dune has data on, there were 366 buyers and 441 sellers. In the last week of June 2022, there were 31,353 sellers and 28,756 buyers. A drop of epic proportions.

The collapse in traders happened suddenly over the beginning of 2023 when numbers fell by more than half within a week. By the second week of January, there were 2385 sellers and 2388 buyers.

Unique Ethereum wallets trading NFTs tell an identical story. Unsurprisingly, since Ethereum is the dominant chain for NFTs. The question remains: how long can the industry explain away sustained contraction as a cyclical phenomenon?

The new(ish) king of NFT marketplaces, Blur, also saw a slowdown this quarter, with a 34% drop in trading volume. OpenSea, which for so long was the dominant marketplace, was hit even harder, seeing its trading volume fall by over 56%.

However, even the most pessimistic observer will know that trajectories in this industry are rarely ever just “up” or “down.”

Bitcoin Ordinals One of the Few Winners

Unsurprisingly, the DappRadar report noted that Bitcoin Ordinals were among the quarter’s winners. Trading volume skyrocketed among the “Bitcoin NFTs,” going from $7.18 million in Q1 to an incredible $210.7 million in Q2. A whopping 2834% increase for the quarter.

The platform also saw a surge in all-time trades, reaching 554,215, and unique traders, totaling 150,969. 

The entrance of Bitcoin Ordinals on the scene was one of the most significant innovations on the Bitcoin network in years. The innovation was possible because of the Taproot upgrade on November 14, 2021.

However, their popularity only took off this year thanks to community buzz and excitement about the potential of so-called “Bitcoin NFTs.” By the end of May 2023, the number of ordinal inscriptions had passed ten million, with most made in the previous month.