NFT Markets Experienced a Roller Coaster Month During June

OpenSea, the largest NFT marketplace, traded $646.6 million in volume during June, down more than 65% from May, according to DappRadar.

Solana NFT (non-fungible token) marketplace Magic Eden registered nearly $111 million in trading volume last month, down 63.5% since May.

This data indicates that declining prices of many underlying cryptocurrencies, including ether (ETH) and solana, combined with sinking NFT floors, may have contributed to plunging trade volumes.

Trends across the past six months show that NFT floor prices have been much more likely to rise when ETH goes up, according to data compiled by NFT analyst @punk9059.

Source: @punk9059 on Twitter

However, trading volume must not be totally conflated with prices, which Bloomberg reported to have “plummeted” due to sinking sales.

Many factors contribute to movement in NFT floor prices. Given that NFTs are momentum assets, floor prices are more likely to go up today if they went up yesterday, and vice-versa tweeted @punk9059. 

The entire market value of the NFT ecosystem went from $35.6 billion to $22.3 billion during the second quarter of the year, as shown by data from NFTGo. Still, the chart below shows the number of NFT holders has been steadily increasing over the past three months, and the number of traders is minimally down by 14%.

Source: NonFungible

“The reduction in the price of ETH has removed trading barriers for many traders,” Boris Rebo, DappRadar research analyst, told Blockworks, which has resulted in continued healthy demand for NFTs despite the pullback.

When it comes to blue-chip NFTs, Rebo pointed out that floor prices may have seen a drop at the start of June but experienced a resurgence that coincided with the NYC.NFT convention. 

DappRader found that Meebits led the pack with a 76% bounce, denominated in ETH, while Doodles and CryptoPunks recovered 44% and 43% and Bored Ape Yacht Club jumped 23%. The number of CryptoPunks traders and sales were also up by 87% and 120%, respectively, on July 1.

It is important to question if floor price or average price are fair indicators of an NFT project’s true value. The floor price may be the latest price of the cheapest NFT in that collection, but it is just one of many value indicators, such as rarity, utility, ownership history, creator reputation and buyer interest. Buyer demand (or lack thereof), leading to a rise or fall in the number of NFT purchases, is what causes floor prices to fluctuate. 

Changes in the number of daily NFT sales, while in decline since the beginning of 2022, are not as drastic in the past three months. NonFungible data shows that while the number of daily sales fell down to 20,000 at the end of June, mid-April recorded the lowest sales count within the past year, at 15,000.

Number of daily NFT sales from April through July 2022 | Source: NonFungible

The top collectibles sales of the month, according to NonFungible, included Bored Ape #7537 for 1,024 ETH, or $1.2 million on June 16; Bored Ape #2488 for 1,000 ETH, or $1.16 million on the same day; and CryptoPunks 8531 for 825 ETH, or $872,916 on June 22. 

Autoglyphs and ArtBlocks were among the top earning collections in the art segment, while BAYC’s Otherside land was the top metaverse NFT earner, and in-game NFTs from Axie Infinity and Loot had the top sales. 

Utility NFTs such as Ethereum Name Service (ENS) decentralized domains saw increased interest in June, with top seller “porno.eth” going for 184 ETH, or $203,892. July 3 marked the sale of the most expensive ENS name, “000.eth,” for 300 ETH or $320,000.  

Other notable June winners are the GoblinTown project that “has completely thrown established practices to the wind” by making the mint free and neither having a Discord nor a roadmap, Rebo said.

The Gallery of Digital Assets (GODA) Mint Pass climbed charts for giving NFT holders access to privately curated modern art collections in addition to supporting emerging NFT artists. 

Overall, June highlighted an immense amount of volatility and activity within the crypto industry. And within the Web3 and NFT space, only the collections that can deliver on promised value are the ones that are going to make it. From multimillion-dollar funding raises and activations at NFT.NYC, Web3 companies will need to determine better ways to measure their customers’ loyalty.

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