NFTs perform poorly in September: Ethereum and Immutable X buck the trend

Blockchain
NFTs perform poorly in September: Ethereum and Immutable X buck the trend

The non-fungible tokens (NFT) market has witnessed a significant dip in the third quarter of 2023. With sales plummeting to their lowest since the last quarter of 2020, September was particularly harsh, logging a mere $300 million in sales. Analysts trace this decline to a dramatic drop in average sales and floor prices of leading collections.

Wake me up when September ends

The descent was noticeable in September. Sales hit rock-bottom figures not seen since January 2021. The average sales price for the month sank to $38.17, a far cry from its August 2021 zenith of $791.84.

Popular collections like Azuki, BAYC, and MAYC didn’t escape, suffering more than a 25% decline in floor prices quarter-over-quarter. However, Azuki has since made a comeback, as its floor price registered an impressive 47% surge in the last 30 days.

Ethereum and Immutable X

Amid the bleak landscape, Ethereum and Immutable X emerged as outliers. As per the Binance Research quarterly report, Ethereum’s market share swelled by 6% in Q3, partly attributed to diminishing gas fees and a fall in ETH prices.

NFTs perform poorly in September: Ethereum and Immutable X buck the trend - 1
Binance Report (Source)

Concurrently, Immutable X, a Layer 2 solution hinging on Ethereum, doubled its market share, climbing from 4% to 8%. This growth was spurred by the platform’s hosting of blockbuster blockchain games like Gods Unchained, one of the most popular play-to-earn games and a sales frontrunner for Immutable X. The game recently launched “Tides of Fate”, its most sprawling expansion to date.

Interestingly, Q3 saw a 4.6% uptick in the number of NFT transactions compared to its predecessor. Gaming NFTs, with titles like Gods Unchained, Axie Infinity, NBA Top Shot, NFL All Day, and Mythical Beings, ruled the roost in transaction counts.

However, the data has some gloomy undertones. The average daily unique buyers shrank by 14.1%, settling at approximately 53,000, and the NFT-500 price index fell 31% in the same quarter. This decline echoes the widespread price dips across various NFT collections.

Blur losing market share

Despite maintaining its position as the top marketplace by sales volume, Blur has been ceding territory to rivals like Opensea, which outperformed in terms of active wallets. Emerging players like Element have been steadily climbing the ranks, their growth fueled by integrations with diverse networks, including Base, Linea, opBNB, Bitcoin, and zkSync.

Fleeting recovery for art NFTs

The NFT art segment could be doing better. Following the crypto debacle of 2022, the art sector of the NFT market has been on a relentless decline in both volume and value. Indications of recovery were fleeting, with the overarching trend still in the red.

Adding credence to the Binance report, data from sources like NonFungible echo the grim figures. September 2022’s NFT art sales, encompassing Ethereum, Ronin, and Flow blockchains, were a paltry $22.3 million. Shockingly, this was a whopping 40 times lower than the same month’s figures from the preceding year. 2022 concluded with an even more disheartening number: $17.1 million.

Entrenched downturn

This slump is not a fleeting hiccup. The data points to a more entrenched downturn, casting shadows over the future viability of the NFT art sector.

To add salt to the wound, crypto and NFT thefts have skyrocketed. Losses for investors have surpassed a staggering $26 billion, translating to malefactors pocketing a jaw-dropping $289,000 every hour.

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