NFT Trading Volume Tumbles 97%; Bitcoin Sell Off Ongoing
NFTs trading volumes fell 97% in September from a record high in January. According to data from analytics firm Dune Analytics, the value of these transactions dropped to $466 million from $17 billion in September from the start of 2022.
NFTs’ Interest Is Waning
The decline in NFT trading volumes is part of a broader decline in the crypto sector as investors lose confidence in the asset’s potential due to the increasing monetary policy tightening. Due to the rapid pace of monetary policy, investors are cutting off their exposure to speculative assets, contributing to a bigger decline in the crypto industry. Since November 2021, the market cap of the cryptocurrency industry has dropped by around $2 trillion.
In August, the number of trade transactions involving non-fungible tokens had dropped by 40% in the second quarter of the year as interest in digital coins decreased. According to Footprint Analytics, the NFT market had also cooled off during this period. During this time, the total trading volume of NFT had dropped from $19.1 billion in the first quarter to $11.26 billion in the second quarter.
OpenSea, the world’s largest NFT marketplace, also experienced a significant decrease in its daily trading volume. On August 26, the trading volume on the platform dropped to $10.05 million, which is the lowest since July 2021. The decrease in the trading volume on the NFT market was attributed to the effects of the crypto winter.
In June, a survey revealed that most people who bought NFTs in the second quarter of 2022 were only interested in making money. It’s no surprise that the trading volume on the market decreased during this period. Over half of the investors who bought NFTs only wanted to increase their financial position.
Economic Data Strong, Bitcoin Sells Off
Bitcoin is currently unable to break above its current price range. However, gains were surrounded by volatility as macroeconomic forces took over the cryptocurrency.
BTC is currently trading at around $19,000. In the last 24 hours, it has experienced sideways movement. Despite the volatility, large cryptocurrencies have managed to maintain their gains from the previous week.
During the weeks before the Ethereum merge, which took place on December 6, Bitcoin on-chain activity was reportedly lit up like a Christmas tree. Although the upgrade was not happening on the bitcoin network, it still increased activity on other networks.
After developers completed the merge, the network activity on the various networks started to decline. That is because the network activity has started to return to normal levels.
The difficulty adjustment for bitcoin mining was performed on December 2, which resulted in a 2.1% decrease in the mining difficulty. That reduced the production rate of blocks to 5.94 blocks per hour. It occurred just before the hash rate hit a new record high.
The difficulty adjustment reduced the average transaction per block, which is good news for bitcoin miners struggling with falling revenues. During the week, the average transaction per block decreased by 1.55%.
The mining hash rate of bitcoin has returned to its pre-merger levels, which suggests a reversal from its previous trend. However, this level remains on the high side. That suggests that miners are still more confident about the future of cryptocurrency.
A Decline in Revenues
Bitcoin miners are feeling the heat due to the market’s lack of recovery. Daily revenues for miners have dropped to around $17 million, which is their lowest point in the last year. That represents a decline of 4.04% during seven days.
The daily fees miners pay have followed the same downward trend, decreasing by 19.49% to $254,199. That has brought down the percentage of the total revenues they make up by fees to 1.48%.
The biggest decliners during the week were the daily transaction volumes and average transaction values. The former experienced a decrease of 37.61%, bringing the average value to $12,304.
The daily transaction volumes decreased by 38.57%, reaching around $3.085 billion. That was the biggest drop recorded during the week. The average daily transactions per day also decreased by 1.55%, reaching $250,755.
Bitcoin’s price has also followed the same downward trend. It could not reclaim the $20,000 mark, which it had been trading at during the previous cycle peak. It has turned into a support level for the bulls.