Following a tumultuous August that saw sales volume surge to record highs, OpenSea recorded a 50% decline in daily volume in the first week of September.
What is OpenSea?
If you haven’t heard of OpenSea, you must have missed the entire NFT craze that swept the cryptocurrency space this summer. After a strong opening to the year, demand for NFTs somewhat died down in spring before skyrocketing in late July. OpenSea, the biggest platform for secondary trading of NFTs, processed $95 million worth of transactions in just two days. By early August, the marketplace had processed a stunning $1billion in gross market volume. Daily volume reached its peak in late August at a mind-boggling $320 million.
NFTs did not go unnoticed by the general public. Sports stars like Stephen Curry changed their Twitter avatars to pictures of their NFTs, and on August 23, Visa announced its purchase of a CryptoPunk for 49.5 Ether. It coincided with a surge in the price of Ether, Ethereum’s native token. A majority of the highly sought-after projects like CryptoPunks and Bored Ape Yacht Club, a monkey-themed collection, live on Ethereum.
Volumes plummet in September
However, the market may just be cooling down after some bearish momentum has seen cryptocurrency prices reverse from local tops. Data from DappRadar indicated that sales volume on OpenSea has declined in the first week of September by almost 50% to $792m. The number of traders registered also decreased to 156,000, 10% less than the previous week.
OpenSea still outranks its competitors Axie Infinity and CryptoPunks, which recorded volumes of $158m and $45m, respectively. Over a 30-day period, sales volume on OpenSea is still in a massive uptrend as well. As of September 21, sales volume is up 162% in the last 30 days, and OpenSea recorded four times more sales than Axie Infinity and Crypto Punks combined. Thus, this correction seems more like a short-term reversal of a somewhat overheated market than an entire shift in trends.
What next for NFTs?
While the wider cryptocurrency market is still looking for short-term stability in prices, NFTs are likely here to stay. Recently, OpenSea added support for Polygon, a layer two solution for Ethereum. Though an employee was caught leveraging insider information to trade, the platform looks set to expand its market-leading position. It also announced the launch of its mobile application available for iOS and Android:
“The calls for a mobile app have been growing, and we’ve been hard at work bringing it to life, […] making NFTs more available to all is one of our core missions here at OpenSea, and we believe this is a big step in an exciting direction. NFTs in the palm of your hand.”
NFT markets have also been launching on other blockchains like Solana, Avalanche, and Tezos. Marketplaces like Rarible, Superrare, and Makersplace have been competing for a share of the growing NFT market. While the short term may hold some pain for NFT gem hunters, the future looks increasingly bright.