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- According to statistics from Dune Analytics, NFT (non-fungible) marketplace OpenSea had a record single-day trading volume of $261 million ether in January. The platform also has 546,000 active users, which is a new high. When a market expands that fast, Benjamin Cohen, managing partner of crypto fund Web 3 Equities, told Blockworks, it’s reasonable to predict that [it] will see huge swings and corrections.
- Investors may also be scared off by allegations that the Securities and Exchange Commission is looking into fractional NFTs for possible securities law breaches. The money grab initiatives will perish in NFTs, according to Stephen Young, founder of marketplace NFTfi, but the broader blockchain-based collectible market will not.
- According to blockchain analytics dashboard DappRadar, OpenSea’s trade volume and transaction plummeted by 36.9% and 14.49 percent during the last month, respectively. According to DappRadar, NFTs earned over $4 billion in sales in February, down 28% from January. Last month’s trading volumes, on the other hand, were still greater than in November and December.
The year of the NFT was 2021, from artist Beeple selling an NFT for $69 million at Christie’s auction house to Block’s Jack Dorsey minting his first tweet.
Huge Swings And Corrections
The bullish trend continued through 2022. According to statistics from Dune Analytics, NFT (non-fungible) marketplace OpenSea had a record single-day trading volume of $261 million ether in January. The platform also has 546,000 active users, which is a new high. When a market expands that fast, Benjamin Cohen, managing partner of crypto fund Web 3 Equities, told Blockworks, it’s reasonable to predict that [it] will see huge swings and corrections.
In February, the multibillion-dollar sector took a turn. According to blockchain analytics dashboard DappRadar, OpenSea’s trade volume and transaction plummeted by 36.9% and 14.49 percent during the last month, respectively. According to DappRadar, NFTs earned over $4 billion in sales in February, down 28% from January. Last month’s trading volumes, on the other hand, were still greater than in November and December.
According to Google Trends, searches for NFT fell by 58 percent in February compared to January. I expect NFTs will suffer a correction, just like any other market instrument, Kevin Kang, founding principal of crypto hedge fund BKCoin Capital, told Blockworks. The risk-off mentality in the market will not be immune to NFTs, as mainstream art collectors tend to view NFTs as riskier assets. Sotheby’s CryptoPunk auction, when a pseudonymous consignor withdrew a large number of CryptoPunks — estimated at $30 million — minutes before the auction, could be a warning of a decline.
Possible Securities Laws Breaches
Investors may also be scared off by allegations that the Securities and Exchange Commission is looking into fractional NFTs for possible securities law breaches. The money grab initiatives will perish in NFTs, according to Stephen Young, founder of marketplace NFTfi, but the broader blockchain-based collectible market will not.
[NFT] prices are a little insane, Young added, so we’re in a kind of bubble and frothy period of the market. [NFTs] are simply unconnected to the crypto market boom. The [number of NFTs] will continue to rise indefinitely. There will come a point when there aren’t enough new buyers to absorb the current supply.
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Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
