NFT is yet another blockchain-based market that went through exponential growth in 2021, starting the second half of the year. This coincided with the memorable crypto all-time high of November 2021, but since then we’ve seen cryptocurrencies lose over 50% in value, with Bitcoin breaking the $30K support for a short while just recently.
An analysis on blockchain data by TradingPedia researchers shows that the recent crypto market decline is not affecting NFT popularity and trade in a negative manner, despite some recent major mainstream media reports claiming the opposite.
To arrive at this conclusion we first ran a query on Dune Analytics to list all NFT trades and counted the sum of unique buyers and sellers, grouping them by quarter. This showed how the last two quarters had a very consistent QoQ active traders growth of 54% and 50% respectively:
When we look at the most recent data for the current Q2 2022, we see that it started with increased numbers of daily active NFT traders in April, averaging at 58K per day. This is 12% higher than March 2022’s average of 52K. In the first 10 days of May, we are observing a return to March averages, despite the ongoing drop of crypto markets:
“In January 2022 we saw the daily average NFT trading volume increase by 439% MoM, while the daily average active traders increased by 77% MoM. At first sight this doesn’t make sense with crypto markets going south at a fast pace. This, however, is rather expected.
With markets stalling or going down many crypto investors try alternative ways to get the high returns they are accustomed to in a bull market.
Another important aspect is that Non-Fungible Tokens’ prices are most often listed in a given cryptocurrency. When the market is down this makes the absolute value in USD lower and attracts new adopters to buy their first NFT.”
In order to illustrate the rise and stabilization of the NFT market in 2022, we combined two of the most important datasets on the same timeline:
- The number of unique active traders (buyers plus sellers) per day
- The volume they traded that day in USD
“It is clearly visible that 2022 opens a new page for NFT with record volumes and record active traders in January. The volumes do fluctuate a lot, but this can be attributed to specific NFT collection launches that spike the interest. The trend looks like it is stabilizing despite the current crypto markets’ decline.”