Crypto Collector Market Collapse: What Causes It?

Non-fungible tokens (NFTs) have been the big drivers in the past bull Market. After the crash of crypto Market, the hype surrounding the digital collectibles continued for a while. However, the market has now reached difficult times. This is reflected, among other things, in the monthly sales volumes of the NFT marketplace OpenSea, both on and on the other side ether (ETH) and the Polygon (MATIC) network.

From the following data Blockchain On the Dune Analytics analytics platform, it’s good to see just how fast and strong the advance of NFTs has been. Around the transition from 2021 to 2022, the market on OpenSea peaked with a trading volume of almost $5 billion. We are now at a new low of around $100 million, down no less than 98%.

OpenSea Trade Volume – Dune Analytics

In February of this year, sales volumes of Ethereum and Polygon-based NFTs reached their yearly highs. These totaled over US$650 million and US$100 million respectively. In August, however, these markets recorded significant declines. Ethereum NFT sales fell 84% compared to February to $106 million. For Polygon NFTs, the situation was even more dramatic: Sales volume was just $7 million, down 94% from its February peak.

In April, a total of nearly 250,000 Ethereum NFTs were sold on the OpenSea platform, down 11% month-on-month and even down 79% year-to-date. The situation was similar to the Polygon NFTs on OpenSea, where sales fell by 37%. This was the lowest sales in nine months.

Blur overshadows OpenSea

The recent decline appears to be mainly factor driven. First, interest in profile picture NFTs, also known as PFPs, has declined. The market capitalization of leading PFP-NFT projects fell from US$5 billion in February 2023 to just US$2.2 billion.

Additionally, the rise of Blur has turned users off. Blur is another NFT marketplace that has grown in prominence since its launch in October 2022. Blur posted an impressive $222 million in revenue last month, despite a 34% decline. In contrast, OpenSea grew 45% over the same period, but failed to match Blur’s sales volumes.

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