The Non-Fungible Token (NFT) arena has been battling persistent headwinds, as indicated by DappRadar’s most recent evaluation. The crucial point under consideration is the duration and depth of this tumultuous period.
NFT Trading Volume Decline: The Story So Far
In July, the NFT trading volume experienced a notable decrease of 29%, plummeting to $632 million. Concurrently, total NFT sales decreased by 23%, settling at 3.7 million. These statistics echo an earlier report from DappRadar, which revealed a 38% slump in NFT trading volume for the current year’s second quarter.
Preceding these findings, in June, DappRadar recorded a 44% contraction in unique daily active wallets associated with the NFT industry. Only a month prior, in May, the same institution highlighted a similar 44% downturn in NFT trading volume.
An Unrelenting Market Contraction: The Continued Dip in NFT Sector
This month, the contraction trend has persisted. DappRadar pointed out a further 19% shrinkage in unique daily active wallets (dUAW), totaling 70,338. That constitutes a mere 4% of the entire industry’s activities.
Nevertheless, the wave of adversities was not confined to NFTs alone. The DeFi sector also felt the tremor as its total value locked (TVL) marginally dwindled by 2.27%, now amounting to $75.91 billion. However, this minor setback in the DeFi arena is unlikely to offer any solace to NFT traders.
The frenzied speculation and hoopla around NFTs resulted in numerous ‘scams and rug pulls.’ The total trading volume for NFTs has dramatically diminished by more than 90% from its zenith in January 2022. Correspondingly, the average price of NFTs has significantly decreased by approximately 70%.
Declining Interest in Profile Picture (PFP) NFTs: The BAYC Case
The dwindling trading of profile picture (PFP) NFTs, touted as the foundation of exclusive Web3 communities, is difficult to disregard. A case in point is the Bored Ape Yacht Club, whose floor price, according to CoinGecko, has been on a sustained downslide.
As enthusiasm for PFPs wanes, industry stakeholders focus on utility NFTs, with applications such as ticketing, to demonstrate that the technology extends beyond merely being a platform for high-priced JPEGs.
The resilience of the NFT market is being tested. The direction it takes amidst these fluctuations will shape the future of digital asset trading.
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