Bitcoin Ordinals Post Impressive Performance During NFT Market Downturn
The general fall in the trading volumes and sales of NFTs may indicate a decline in investor interest.
Bitcoin ordinals have been performing well since the first quarter of 2023.
Blur and OpenSea NFT marketplaces recorded drops in trading volumes and sales.
Keywords: NFT trading, NFT holders, NFT traders, trading volume, NFT market, value of NFT market, NFT market report, NFT market analysis
Introduction
The non-fungible token (NFT) sector which has been performing very well during the previous years is facing critical challenges. Various metrics on NFTs show negative trends in the sector such as decreasing trading volumes and sales. However, it has not been totally hopeless as some Bitcoin NFTs, called BTC Ordinals, performed well during the second quarter of 2023.
This article will discuss possible causes of the declining NFT performance and the future potential of the NFT sector.
NFTs’ Poor Performance in Q2
The fall in NFT sales and trading volume indicates that the market for these digital assets is not healthy. According to the DappRadar report the trading volume, which shows the total value of non-fungible tokens traded within the period, fell by 38% during the second quarter of 2023.
The decrease in this metric indicates that the interest of investors in non-fungible tokens had been very low during that period. Also, the total NFT sales for the second quarter decreased by 9.2%, suggesting that the buyers have been very cautious when investing in non-fungible tokens. The fact that both the NFT trading volume and sales decreased within the period paints a gloomy picture of the sector.
As if that was not enough the number of unique buyers and sellers also decreased within that period. For example, according to Dune in the first week of July there were 366 buyers and 441 sellers. Yet, in the last week of June there were 28,756 buyers and 31,353 sellers.
The decrease in the number of unique buyers and sellers who are participating in trading NFTs did not start in the second quarter of 2023. The drop in the number of NFT traders started in the first week of January 2023 when the number of unique wallet addresses in that period fell by almost half.
The Most Affected NFT Marketplaces
The decrease in the value of the NFT market was witnessed in different market places. For instance, the trading volume of Blur, the current leading NFT market place dropped by 34% while that of OpenSea, the second-largest player, fell by 56%. Notably, the trading volume of CryptoPunks decreased by 47% within the same period as well.
In what stood out to be unique, the NFT trading volume of Immutable X Marketplace and JPG Store rose by two-digit figures, 37% and 64% respectively. However, the DappRadar report emphasized that the decline in NFT trading volume does not indicate a decrease in the market interest on non-fungible tokens.
It said, “It is critical to avoid equating trading volume with the level of market excitement. A dip in trading volume doesn’t necessarily indicate a waning of market interest or activity. This is evidenced by the fact that in Q2, there were still 18.6 million sales, representing a decrease of only 9.2%.”
Nevertheless, the volume of NFTs on the Bitcoin blockchain, the Ordinals, was impressive during the period.
Performance of Bitcoin Ordinals in Quarter 2
The DappRadar NFT market analysis shows that BTC ordinals gained much within the second quarter. Specifically, the trading volume of the ordinals increased from $7.18 million in the first quarter to $210.7 million in the second quarter, representing a 2,834% rise.
Nearly 150,000 NFT traders participated in buying and selling BTC ordinals within the period. As a result, there were a total of about 550,000 Bitcoin Ordinals trades which was a new all-time- BTC trading volume.
Bitcoin Ordinals - Webflow
In fact, the introduction of BTC ordinals was a game changer in the NFT market. By the end of May, due to the high performance of Ordinals, the Bitcoin blockchain surpassed Solana to become the number two most popular NFT blockchain. Of course, the Ethereum blockchain has remained the leading blockchain in terms of NFTs activity.
Data on Dune Dashboard also indicates that over 15 million Ordinals have been inscribed on the Bitcoin blockchain since their inception early this year. That racked more than $54 million for the bitcoin miners during the first quarter of 2023.
This development was well received by Bitcoin maximalists who believe that the BTC ordinals will sustain the blockchain in the long run when all Bitcoin coins are mined. Likewise, the Ordinals have created a new use case for the blockchain.
However, some critics of cvxcrv crypto say that they cause congestion on the blockchain which pushes the transaction fees up. They also claim that the popularity of BTC ordinals overshadows Bitcoin’s actual financial activity which damages its reputation as a dependable Peer-to-Peer (P2P) payment .
Conclusion
The market for non-fungible tokens contracted in the second quarter of 2023 since their trading volume and sales decreased remarkably. The number of NFT traders also decreased, leading analysts to conclude that there has been a decline in market interest of NFTs. However, the trading volume of BTC ordinals increased within the same period.
FAQs about Non-fungible tokens (NFTs)
What is trading volume for NFT market?
The trading volume for the NFT market is the total value of non-fungible tokens that have been traded within a specific period such as one month. A fall in the trading volume of an NFT does not mean that investors have lost total interest in it.
What are Bitcoin Ordinals?
Bitcoin Ordinals are non-fungible tokens that are created on the Bitcoin blockchain. The BTC ordinals have increased transaction activities on the Bitcoin network and will continue to support miners in the future.
Is the NFT industry growing?
Generally, the NFT industry is growing due to the increase in the number of NFT platforms and marketplaces. BTC ordinals, the NFTs that exist on the Bitcoin blockchain, have increased the interest that investors have in non-fungible tokens.
What will the NFT market be in 2025?
The NFT market is likely to reach a market capitalization of 80 billion by 2025. The convergence of the physical and digital worlds that allows brands to expand their reach is likely to make the NFT sector a multibillion industry.
