There was some initial excitement this week regarding soaring NFT sales on Arbitrum. Unfortunately, many people got their hopes up too early. Despite a significant multi-day volume spike, momentum is returning to more normal levels, indicating the run is over.
Arbitrum NFT Volume Surpasses $1m Again
It is never a bad thing to see alternative blockchains build strong momentum. Although Ethereum is the go-to network for NFTs, there are better ecosystems. Arbitrum has the potential to disrupt the market a bit, although it will require sustainable NFT trading volume to do so. That may prove the Achilles’ Heel, as the earlier “pump” in NFT sales was shortlived. More specifically, it lasted for only a few days, and sales figures have collapsed.
It is not the first time Arbitrum has seen a sudden spike in NFT trading. Similar developments happened in April 2022 and late September 2022. For some reason, people create a flurry of activity before things subside again. It looks akin to a pump-and-dump of one of the many useless altcoins on the market. Sustaining volume is very difficult, even if there are more unique buyers and sellers than earlier this year.
Numbers-wise, Arbitrum surpassed $1.138 million in NFT sales this month. That may not seem like much, but the last time it had over $1 million was in April 2022. The peak, noted in March 2022, of $11.56 million will remain well out of reach. This month’s volume mainly stems from higher trading on November 4,5,6,7,8 and 11. None of those days broke the $100,000 mark, but there were notable volume increases. The volume on the 25th was $18,809, which is much closer to the average.
Another big development is how the average NFT sale price on Arbitrum dipped below $10 on November 19. That was a near 50% decline day-over-day as the average was $16.21 on the 18th and $26.65 today. There is ample volatility in NFT prices on the network, which may not necessarily be good. Moreover, the unique buyers almost hit 2,500 on November 20, yet dipped to 761 on November 29.
NFT Unique Buyers Plummet
Seeing the number of NFT buyers decline again isn’t entirely surprising. The sudden upward momentum in buyers is beneficial, but there are too many “pump-and-dump” similarities. Seeing the buyers go from 4,700 in July to almost 40,000 in November is strange. Moreover, they doubled from August (9,334) to September 2022 (19,199), and then doubled again in October (44,867). Explosive growth, but not necessarily sustainable.
That said, NFTs on Arbitrum are very affordable. Anyone can spend $20 on an NFT – although always research investments and see if there is any value. That makes the network more appealing than Ethereum, Solana, or other chains. Additionally, Arbiturm’s low fees and fast transactions benefit collectors and investors. However, there are serious concerns regarding Arbitrum sustaining this momentum for more than a few days in a row.
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