- The NFT space recorded a record-breaking $10.37 billion in sales in Q3.
- NFT purchases on the OpenSea marketplace reached a total of 3.8 million sales in Q3.
- Collectibles are gaining more mass recognition, with CryptoPunks, BAYC, and CyberKongs leading the charge.
Blockchain epochs are characterized by financially yielding and industry-disrupting events. Between 2020 and 2021, industry trends converged between DeFi and NFTs, with the latter gaining additional attention because it extends a demanded requisite in the digital space. The NFT frenzy spiraled into what could be described as the “NFT Autumn” as sales volumes for NFTs surged to $10.7 billion.
NFTs Are Hot Topics
The NFT registered a 706% increase in value since Q3 as demand for NFTs across multiple platforms reached a total of $10.67 billion in sales. What’s also striking is that the Ethereum and Ronin blockchains capitalized on the market boom, accounting for 77.38%, and 19.53% respectively of the total amounts sold during Q3.
With demand for Ethereum NFTs peaking, so have gas prices, as users sought to achieve faster transactions in a short period of time, which has fed into an Ethereum gas war, where GWEI prices could reach 3000 in a short interval.
In Q3, single item sales did not exceed Beeple’s $69.9 million purchase; however, Reuters indicates that collectibles accounted for most of the network’s sales in September. As DappRadar suggests, collectibles such as CryptoPunks, NBA TopShot, and Bored Ape Yacht Club are among the top Q3 market cap contributors.
With NFT focus diverting from art and more towards collectibles, a speculative bubble is forming around the NFT space. NFT Nick, an NFT collector and host of The Nifty Alpha, told Dailycoin in a direct message that “the speculative boom we are currently experiencing will inevitably have many losers,” indicating that people will get “burned” in the short term. Moreover, NFT Nick notes that NFTs, aside from the “fun” speculative investing aspect they offer, will bring “transformation, unlike nothing we’ve seen before.”
On The Flipside
- An OpenSea employee was accused of insider trading, which forced the company to revise their policy.
- NFT collectibles can hinder maker perception if they cause financial fallout.
- Tokenization of NFTs is considered a highly speculative method for NFT creators to increase their revenue.
The market’s focus has turned towards blue-chip NFT collectibles such as CryptoPunks or BAYC; gaming NFTs are reaching new audiences. According to the same DappRadar report mentioned above, Axie Infinity registered a total of $2 billion in trading volume in September, noting that their move to the Ronin sidechain helped the game generate “$776 million in revenues.”
Notable personalities, including Snoop Dogg, Shaquille O’Neal, and Steve Aoki, join exclusive communities and showcase their status, or “flex” through their profile pictures. As a result, showing support for NFTs in the form of Twitter avatars has given the NFT market positive reinforcement.
NFT collector and trader TappySF told DailyCoin in a private message that volumes in the NFT space can be double-sided. He believes that NFT growth is done in phases, noting a floor drop and the lack of sales during 2 weeks in September. Venture capital interest is beneficial for the NFT sector; however, TappySF suggests that such capital influx could lead to a drop in transaction volume.
DappRadar notes that a new form of utility is spearheading NFT growth, elaborating that the fact that NFT ownership adds additional perks, including passive income or “additional NFT drops,” to incentivize supporting a project.
In contrast, creative ways to incentivize holders can lead to legal issues, where a token’s value can be deemed a security. For example, in October, an NFT titled DAO_Turtles was banned from OpenSea, after amassing over $2 million in sales, for breaching OpenSea’s terms and conditions.
Why You Should Care?
NFTs are converging into a mix of value and speculation, and young investors are susceptible to falling for pump and dumps, in different packaging. Not all NFTs will hold the same value as time goes by, and it is worth examining the value of each NFT individually.