NFT volumes back to ATHs
While Bitcoin and Ethereum have been in a decline since December, NFTs have been pulling numbers. It seems that the NFT market is moving in a different direction as volumes are increasing and floor prices for some collections have been rising significantly.
Why? It may be caused by the launch of the ‘PhantaBear’ collection back on January 1st. Within 24 hours it broke the record for trading volume on a single collection. It shows that NFTs are still very appealing to retail and that NFT trends come and go in waves.
During the summer of last year, NFTs were extremely hot and OpenSea experienced their first multi-billion dollar volume months. After that, the NFTs became less interesting to retail and we saw many influencers launch their own projects. Recently, the space experienced increasing volume numbers again. Will a second NFT season be upon us?
OpenSea is by far the king of NFT marketplaces. It is the platform where it all started for NFTs and it is still the king when it comes to volume, collection amounts, and usage. Despite criticism on the centralization and the sporadic website failures, the platform has managed to maintain its position and grow in terms of volume and user base.
A dashboard on Dune Analytics made by Richard Chen shows precisely how much OpenSea has grown over the past year. The first graph shows the monthly volume on the NFT marketplace and truly reflects how much more volume happened in August of 2020. It also shows how gradually volume shrunk and spiked back up last month.
Right now we are not even halfway into January and already at the same volume levels of November. This is further confirmed by the second chart that shows the daily volume from October till now. There has been a gradual, but significant increase over time.
The platform is on pace to achieve $6bln in volume if it pulls the average daily volume of the past 12 days. Furthermore, the platform is on pace to reach a new all-time high in monthly active traders on Ethereum.
The previous highest amount was in December of last year around 362,000 users have made a transaction on the platform that month. For January that number is already 282,000 and again, we are not even halfway through the month. It must be noted there that the users are the active addresses registered to the platform and users can have multiple accounts under management.
In a recent funding round, OpenSea raised $300mln from investors. The round was led by Paradigm and Coatue Management, and it brings the valuation of the platform to a staggering $13.3bln. This is a huge achievement for the 4-year old company and it shows how much the NFT space has grown over the past year.
Due to the increase in popularity of NFTs, some collections have seen a rise in floor price. There are thousands of collections on the market, some more well-known than others. Two collections everyone should take note of though are CryptoPunks and the Bored Ape Yacht Club.
The first is a collection that dates back to June 2017 made by the studio Larva Labs. The collection consists of 10,000 unique, pixelated characters, some with more rare traits than others. CryptoPunks were commonly perceived as the biggest NFT collection and the collection that spared the ‘10,000 NFTs’ standard for a lot of other collections.
Often CryptoPunks are seen as the ‘holy grail’ of NFTs. Currently, the floor price of a CryptoPunk is close to $200,000, but ‘alien’ or ‘ape’ punks have been exchanged for millions. For a long time, CryptoPunks was the most valuable collection on the market, but recently they have been overtaken by Bored Ape Yacht Club.
Bored Ape Yacht Club, short BAYC, was launched in April of last year. This collection also consists of 10,000 unique characters and in BAYC’s case, those characters are apes. Over the past year, the creators and fans of the project have rallied a very passionate community. Throughout the months, the floor for an ape has been steadily rising and recently it has taken over CryptoPunks as the most valuable NFT collection on the market. The floor price for an ape is now $250,000, and like the Punks, more rare apes go for millions even.
Last year, retail experienced crypto through NFTs. The digital art pieces are very appealing to a very broad audience and were only purchasable with a Metamask wallet and Ethereum. The summer of last year can truly be dubbed as the NFT era of crypto. A period during which many NFTs were traded and OpenSea became a household name within the industry.
Recently, volumes have picked up again, whereas majors like Bitcoin and Ethereum have been trending down. BAYC even flipped CryptoPunks in floor price. Things are clearly heating up again and the true winner here will be OpenSea that is generating more revenue than ever.
This all might seem cool and profitable. But understand that besides cool, qualitative NFTs, there are also ‘vaporwave’ NFT collections out there. Basically, a lot of promises, but no real underlying value. As always do your research and only invest what you are willing to lose. Especially in assets like NFTs.