Recent findings by Oxalus illustrate the vast number of new NFT collections coming to the OpenSea marketplace. It is evident creators and teams want to establish a presence in the most prominent NFT marketplace. However, one must also question whether this growth rate is sustainable or if it dilutes the overall market value further.
OpenSea NFT Collection Pace
It is remarkable to see how many NFT collections make their way to the popular OpenSea marketplace every month. Anyone in the world can issue a collection, but bringing value to it is very different. Even today, most of the projects on the marketplace will not offer much – or any – long-term utility or benefit and mainly serve as “quick flips” for keen traders.
Per Oxalus, there is a steady influx of new NFT collections on OpenSea every month. More specifically, the momentum had decreased a bit since May 2022, when several thousand new projects were added in quick succession. Ever since the monthly volume has dropped a fair bit, although there are still hundreds of new additions every month. It has been a remarkable ride since November 2021, with several peaks along the way.
What is intriguing is how those peaks materialized during times when the crypto markets turned very bearish. There is a correlation between interest in NFTs and crypto prices. When markets are bullish, NFTs almost become an afterthought. However, when NFTs are bullish, crypto assets are often under tremendous bearish market pressure. That recycling of wealth cannot go on indefinitely, though.
Even so, the overall additions to OpenSea continue to pile up. On the one hand, it is good to see so many artists and creators take an interest in this new paradigm. On the other, it dilutes the value of the industry created by established projects, as most people want to chase the “next big thing” in search of quick profit.
Do We Really Need All Of These Collections?
Similar to the growing number of cryptocurrencies and tokens, the NFT market can become oversaturated. With hundreds of new projects arriving on OpenSea weekly, it becomes nearly impossible to separate the good collections from the clutter. It is a tough challenge, especially for those who might not be too knowledgeable about the industry yet. Finding the projects with utility takes time, but price floors may have moved up significantly by then. Even then, the number of collections with utility on OpenSea is small compared to the hype- and influencer-driven projects. It may be worth looking into collections working with renowned PR agencies to get their message across.
The ultimate question is figuring out when enough is enough. Unfortunately, there is no clear answer to that in the NFT space just yet. Anything can happen in this industry, and many collections succeed in building short-term momentum. However, if there is no point to owning an NFT – and serving as just a profile picture isn’t utility, no matter what others might tell you – one must wonder if so many collections will continue to make their way to OpenSea in the future.
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