Less than 24 hours ago Marketingwithanoy looked at a collection of data on the market for non-fungible tokens (NFTs). Our goal was to better understand the level of demand for NFTs in light of the number of recent funding rounds at startups engaged in creating, trading or monetizing the digital signatures.
Given an overall decline in trading volume for a large number of assets — blockchain-based and otherwise — it was not a huge surprise to find that NFT sales volumes are also declining. Not to zero, mind, but material while the crypto market resets itself during one of its regular recessions. Like the larger business cycle, the crypto market has its own swings between periods of optimism and pessimism.
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After we published that piece, some people reached out and suggested that we weren’t looking at the right statistics to support our claim that the NFT slump was real. So let’s take another look.
There are a few ways to measure the health of a market. One way is the total sales by unit volume, which was the method we chose yesterday. Another way is to track how value is held by individual units, for example in the stability of bottom prices for popular NFT sets. You could also follow the total where the of traded assets rather than their unit volume.
Let’s add the last two to our analysis to see if we were ignoring illuminating data, and therefore accidentally slippery yesterday. To work!
NFT Statistics, Part Two
The Block, a publishing and data source, provides a lot of information related to NFT sales, sorting by category, trades, chain and more. The Block also has a dataset related to traded value. Using the same time frame of the year so far that we did yesterday, the publication follows the trading volume of NFTs, or the dollar value of NFT transactions:
Sharp-eyed readers will note that this chart supports our view from yesterday that there has been an overall decline in NFT trading since the start of the year. That said, there is a spike in the April/May time frame that stands out compared to our chart from yesterday. What drove it? Yuga Labs Otherdeed sales, it seems, were good for nine-figure dollar volume.