OpenSea’s trading volume in the NFT market falls by 99%. Does the bubble burst?

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Trading volume on the Top NFT OpenSea market has fallen 99% since its peak in May, suggesting that the NFT bubble may have burst sooner than expected.

On August 28, OpenSea processed $9.34 million in NFT (non-fungible token) transactions, well below its May 1 peak of $2.7 billion, according to data from decentralized application tracker DappRadar.

The number of OpenSea users also dipped to just 22,140 on Sunday, September 5, from nearly 60,000 in January, according to data from DappRadar.

OpenSea refuted the DappRadar data, saying Fortune that was an unfair comparison.

A spokesperson said the data tracker compared OpenSea’s record trading day to one of its lowest. The spokesperson added that the company is not worried about the drop in trading volume.

OpenSea prefers to calculate ETH volume, which excludes the effects of cryptocurrency price fluctuations.

Yet, even by this metric, monthly trading volume from May to July still fell by 62% and is poised to drop further in August, Fortune said, citing crypto-tracking platform Dune Analytics.

“We’re playing the long game because we see what’s possible, so we’re not so concerned about short-term volatility… We were still expecting foam, hype and deflation as the community and use cases are evolving, technology is getting more sophisticated, and creators are figuring out how to incorporate more utility into their projects,” the spokesperson told Fortune as told.

“We’re playing the long game because we see what’s possible, so we’re not so concerned about short-term volatility… We were still expecting foam, hype and deflation as the community and use cases evolve, technology becomes more sophisticated, and creators find ways to incorporate more utility into their projects.

OpenSea

The slowdown in NFT transactions on OpenSea comes amid warnings of a second-half crypto winter, with some analysts even predicting the bursting of the NFT bubble.

“The reality is that we have entered an unprecedented combination of crypto winter and general macroeconomic instability, and we need to prepare the business for the possibility of a prolonged downturn,” Finzer wrote on Twitter in mid-2018. July.

OpenSea, which has achieved a valuation of $13.3 billion after raising $300 million in its Series C funding in January, fired about 20% of its workforce in July as the company prepares for the worst, according to CEO Devin Finzer.

“The reality is that we have entered an unprecedented combination of crypto winter and general macroeconomic instability, and we need to prepare the business for the possibility of a prolonged downturn,” Finzer wrote on Twitter in mid-2018. July.

“The changes we are making today allow us to maintain several years of trail in various winter crypto scenarios (5 years at current volume) and give us great confidence that we will only have to go through this process just once,” Finzer added.


OpenSea is currently positioned among the top NFT marketplaces. NFTs have been around since 2012, with the sale of a “color coin” on the Bitcoin blockchain. Others, however, claim that NFTs only emerged in 2017 when Larva Labs released collectible digital characters called CryptoPunks that were traded through the blockchain.

But NFTs only became mainstream in the last year, as they became an avenue for trading art. Some of the most talked about NFT sales over the past year include the $69 million deal for a digital work by Mike Winkelmann, also known as Beeple, and the first tweet from Twitter founder Jack Dorsey, which sold for $2.9 million.


In the music industry, artists have also joined the NFT movement after the COVID-19 pandemic upended the live music industry in 2020, prompting musicians to seek alternative sources of income.

Justin Blau, aka 3LAU musician and producer, is an early adopter of NFTs in the music industry. He raised $11.6 million for his Ultraviolet collection of 33 different NFTs in February 2021.

Nashville’s Kings of Leon became the first band to release an album as NFT in March 2021, dropping three types of tokens as part of a series titled “NFT Yourself”, on the YellowHeart blockchain platform for their ” When You See Yourself Album”.

Grimes raked in around $6 million in just 20 minutes after the Canadian singer sold 10 exclusive digital artworks on the NFT Nifty Gateway marketplace in March 2021, while electronic DJ/producer Steve Aoki released his first collection NFT, Dream Catcher, during that same month, raising $4.25 million.

But while some say NFTs are the future of the music industry and other art forms, some fear the bubble may burst soon.

Those concerns have intensified in recent weeks after the prices of blue-chip assets like the Bored Ape Yacht Club fell alongside falling cryptocurrency prices. NFTs are priced in the native currency of the blockchain on which they were traded, which makes them susceptible to slowing cryptocurrency prices.

Tyler and Cameron Winklevoss, CEO and chairman of cryptocurrency exchange Gemini, in a June blog post, said the industry is now in a crypto winter.

“This is where we are now, in the contraction phase moving into a period of stasis… All of this has been further aggravated by the current macroeconomic and geopolitical turmoil,” they said.

OpenSea’s Finzer, however, remains bullish on the potential of NFTs. After laying off workers in July, Finzer said, “Over this winter, I expect we will see an explosion of innovation and utility in NFTs. With the tough (but important) changes we’ve made today, we’re even better positioned to conquer what will soon become the biggest market on the planet.The music industry around the world

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