Sept. 2022, Dan LeBaron
Data Source: Footprint Analytics - NFT Volume in 2021 Vs. 2022
Although NFT has been around for a few years, the technology exploded in popularity in 2021, driven by the launch of large-scale projects such as Bored Ape (BAYC).
Seemingly suddenly, celebrities, athletes, and major art collectors were drawn to the space, and many began swapping out their normal profile photos for ones featuring animal JPEGs or pixelated punk characters. Outside of PFP (profile picture) projects, NFTs popularized genres like generative art, and organizations like Art Blocks rose to prominence at breakneck speed. Meanwhile, leading NFT marketplaces like OpenSea have become household names while welcoming a steady stream of new users.
At the peak of 2021, participants in the NFT space were excited as the value of projects across the space skyrocketed, and people all over the world joined in a frantic sprint to find the next hidden gem that would emerge. The whole phenomenon was reminiscent of a gold rush, but predictably, it couldn't last.
Today, NFT trading volume has significantly dried up. That’s despite the massive drop in value of the vast majority of cryptocurrencies, meaning that the same NFTs that collectors rushed to buy in 2021 are now more affordable. So, how far has the industry fallen? Are we "too early" or will the 2021 peak never come again? While the answer to the latter question has yet to be written, we can explore the former by isolating the performance of the field as a whole, and leading projects and markets this month compared to a year ago.
The year-on-year change in the total volume of NFT transactions in September
NFT Transactions, September 2021- FINAL
According to the total cross-chain and cross-market NFT transactions in September 2021, we can see that the peak of the month was reached on September 18, 2021, and the sum of all NFT transactions exceeded $327 million. The fewest transactions for the month occurred on September 27, 2021, with 14,599 transactions, although this was the only day of the entire month that saw fewer than 23,000 transactions occur. All told, there were 16 days in the month where more than 100,000 transactions occurred. Now, for comparison, let's see how these numbers compare to September 2022.
Compared with the same month last year, the trading volume of the entire NFT field in September 2022 has experienced a major decline. The busiest trading day in September this year saw just over 42,000 transactions, less than 1/10 of the previous year's peak. Throughout September 2022, there will only be two days in total where the transaction volume exceeds 40,000.
OpenSea transaction volume year-on-year change in September
NFT Volume in 2021 Vs. 2022
Another strong indicator of the bearish sentiment surrounding the NFT space right now is the drop in trading volume on OpenSea, the most popular NFT marketplace in the world. In the chart above, September 2021 volumes contrast sharply with September 2022. In September 2021, the most transactions in the market occurred on September 2, 2021, with a transaction volume of more than 68 million US dollars. There is no day in September 2021 where the market volume falls below $4 million. Fast forward to September 2022, and things have changed. There was only one day in September this year when the market traded more than $1 million, and no other day had a volume of more than $500,000.
These graphs show that OpenSea’s transaction volume has dropped exponentially from last year to today. At best, this is a clear indicator that we are in the midst of an aggressive bear market, and at worst, it suggests that the highs experienced by the space last year were actually the peak of the NFT bubble.
Year-on-year change in the performance of leading projects
According to statistics collected by OpenSea, CryptoPunks, BAYC, and Art Blocks Curated experienced the 1st, 2nd, and 5th historical trading volumes in the market, respectively. Knowing that these are some of the most popular projects across the industry, looking at the current sentiment for these projects compared to sentiment a year ago is another indicator of the overall state of the industry.
BAYC, CryptoPunk, ArtBlocks Curated Transaction Volume, Sep 2021
In September 2021, there were over 3,000 Art Blocks Curated transactions on 3 days. Plus, there were only four days in the entire month that Art Blocks Curated had fewer than 500 transactions. It makes a lot of sense to look at the numbers related to Art Blocks Curated, as there is a wide range of options for people on different budgets. As of September 2021, even the most cost-effective BAYC or CryptoPunks NFTs are only within the reach of high-net-worth individuals. However, it's still a useful exercise.
On September 16, 2021, the most CryptoPunks sale took place with 131 such transactions. Additionally, there were over 50 CryptoPunks transactions on 7 days during the month.
Finally, BAYC transactions reached 230 in September 2021, which occurred on the 5th of the month. Overall, there were 13 days in the month with more than 100 transactions.
BAYC, CryptoPunk, ArtBlocks Curated Transaction Volume, Sep 2022
The graph above highlights the continued decline in volume in 2022 compared to 2021, although BAYC is an exception in some respects, which we describe below. Far fewer Art Blocks Curated transactions occurred this month than in the previous year, and the project hit its cap of 906 transactions on September 12, 2022. In September 2022, the project also had 10 days with a transaction volume below 300, and there will be no such days in 2022.
There were no days with more than 50 CryptoPunks traded in September 2022, compared to 7 days the previous year. The project's most transactions occurred on September 27, 2022, with exactly 50 purchases. There are still 9 days, and the transaction volume is only in the single digits, which never happened in September last year.
As mentioned, BAYC appears to be an exception. The total transaction volume for September 2022 peaked at 330 transactions on September 24, 2022, which is 100 more transactions than any day during the same month last year.
Summarize
The NFT space is still too early to say conclusively whether the bubble has burst, or whether macroeconomic concerns and an ongoing bear market are the biggest culprits for the decline in numbers in the space. However, with the massive decline in overall transaction volume, as well as the decline in transaction volumes of marketplace platforms like OpenSea and leading projects like Art Blocks, it is clear that the space today has lagged far behind in terms of capital flows and overall activity Where it used to be. While some projects will continue to emerge to buck the current trend of relative disinterest in the space, collectors and enthusiasts should be careful because the gold rush is over, at least for now.
This article is contributed by the Footprint Analytics community
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