A new report has just been released on the state of the NFT market, which is also shown to be down in the third quarter of the year.
NFT market highlighted by the report
The NFT market is still in steep decline and seems unable to recover after the boom it experienced in 2021. While the second quarter showed a decline of about 25% compared to the first quarter, the decline was much more pronounced in the third quarter, with a drop of more than 75% in the dollar volume traded. In the third quarter, trading volume had been over $7 billion, while in the third quarter it plummeted to $1.6 billion.
This is one of the main figures emerging from the new report of the non-fungible corporation, on the third quarter of the year for the Non-Fungible Token market. The biggest drop is in the total volume of resale profit, which plummeted from $2 billion in the second quarter to only $326 million in the third quarter, down 84%.
At the same time, the volume of resale losses also declined, from $1.4 billion to about $780 million in resale losses. Indeed, for the first time ever, NFT trading posted a quarterly loss, with just over $450 million total losses (Profits – Losses).
The report reads:
“Beyond these trading-oriented indicators, it is interesting to note that the size of the community has changed relatively little, with an average drop of 17% in the number of active wallets. Similarly, the volume of sales has stabilized slightly above the 10 million trades per quarter mark.”
Another important element to highlight the consistent decline in the market is Google search data pertaining to NFTs.
At the end of June 2022, search volume was again below the threshold reached in October 2021. In mid-September, this score was at its lowest value in 12 months with a score of 12. This represents practically half of the search volume between June and September.
China is by far the top country in terms of Google search volume. This definite interest in NFTs is in contrast to the very repressive government attitude toward anything related to the cryptocurrency industry.
Four of the five countries with the highest search volumes are in Asia. The only non-Asian country to make the top 5 is Nigeria.
Market analysis in detail
The Collectibles segment has given way to the dominant Utility segment in terms of the number of active Sales and Wallets. Despite a very complicated trading environment for collectibles, 7 out of 10 of the most profitable collections come from this segment.
In contrast, the gaming sector is showing good health. Despite a significant decline, the number of crypto gamers seems to be holding at a good level considering the context. The volume of transactions even increased significantly (+150,000) compared to the previous quarter.
In contrast, the art and Metaverse-related sectors declined. In sharp decline were the famous collections of the Bored Ape Yacht Club, which, after $2 billion, made in the second third, collapsed to only $182 million in the third quarter.
Despite this, the so-called blue chips of NFTs remain the assets on which profit on resale can best be leveraged.
These are the assets that are held for longer periods of time. The length of ownership explains these very high-profit rates.
During this quarter, only 3 sales managed to generate more than 1 million in profit for the seller.
