State of the Market

NFT trading volumes continue to decline through May, with weekly OpenSea sales hitting yet another low for this year ($280M). Since this is in dollar terms, it is partially related to the drop in ETH price, now down approximately 35% since the end of April. This week, we have added data from X2Y2, another LooksRare/OpenSea competitor.

The number of unique wallets (on Ethereum) that purchased an NFT in May remains relatively high at around 300,000, although down from the previous month. A rise in the number of buying wallets over time signals the growth of the overall NFT market. The average transaction value has remained steady over the past months, at around $1225 (~0.63 E).

Note that the chart above is not filtered for wash trading

The competition among NFT marketplaces is fierce. While overall trading volumes have fallen through May, X2Y2 has continued to increase its market share, overtaking LooksRare. This is likely due to a combination of:

Lowering its trading fees to 0.5% for May (and now extending into June).
More people using NFT aggregation platforms such as Genie & Gem and are thus marketplace-agnostic, picking the lowest prices. Because they provide a better user experience, the shift to using marketplace aggregators instead of purchasing directly from individual marketplaces will likely continue into the near future.

It remains to be seen if X2Y2’s market share will be sustainable once the trading fee rebates end. Meanwhile, it’s a great place for trades.

A narrative that received some traction last year was that ‘blue-chip’ NFTs could be a hedge for ETH prices and that they would hold their value in USD terms. Looking at the data over the past 8 months, it was a reasonable idea between Oct’21 – Jan’22. as BAYC floor prices (in ETH) rose even as ETH fell. However, we can see that this is no longer the case, and both BAYC floor prices and ETH prices have been trending in only one direction in May — downwards.

Top NFT Collections This Week

It’s been another low volume week with minimal price movements in the ‘