Is NFT trading ready to recover?

It seems NFT trading volumes have begun to recover this side of the year, with March trading volumes almost reaching $2bn. It represents a 4% decline from February’s trading volume which was even higher at $2.04bn.

NFT sales however have declined from a wider perspective, and some investors have become wary of the speculative nature of the market. It might take several months of sustained high trading volumes before it can be deemed to have fully stabilized.

The NFT space exploded in 2021 bringing widespread investment and attention. However, in 2022, interest in the space was not immune to the market downturn – which saw crypto asset prices plummeting. This new monthly volume data however might suggest that investor interest in the space is undergoing a resurgence as crypto prices have since the beginning of the year.

What’s helping NFT-interest surge?

While the recovery of crypto asset prices and the potential of mainstream NFT adoption have helped spur on the industry’s recovery, there are other factors at play.

Specifically, the rise of a new NFT marketplace called Blur which is threatening OpenSea’s historical market dominance. The majority of the trading volume which took place in March was facilitated by Blur, with $1.35bn in volume being handled by the marketplace – partly due to its rewards program. Although OpenSea now has its own rewards program through its recently released OpenSea ‘Pro’ platform.

Some however have pointed out that a large amount of Blur’s volume might be what is known as wash trading (when traders buy and sell NFTs back to themselves), in order to take advantage of Blur’s attractive rewards program. As we progress through the year, NFT investors will be keeping close watch of Blur’s market position with respect to OpenSea, and how its emergence affects the space.