Despite an Uptick in Unique Buyers, NFT Sales Volume Declines
Author: Rachel Martin and Mandee McFerren
Caption: As seen in the graph above, the daily sales volume of NFTs have been on a downtrend since early September. Despite that, the number of unique NFT buyers has slowly trended upward, with a recent spike at the end of October. The biggest collections of NFTs that we have discussed in other blog posts have cooled down as unique sales and trades both slow.
NFTs have been the hype of the crypto and art sectors, and with talk of threatening to upturn the typical art market and create a new form of economy they are seeing rapid growth and sales across the world. At the same time, outsiders have been questioning how sustainable this market truly is.
The NFT market recently experienced a massive uptick in unique buyers, however the daily sales volume of NFTs has declined since the boom at the beginning of this summer. The sales volume of NFTs is nearing $50 million after ending this summer at almost $200 million, while the number of unique buyers has risen from around 45,000 to nearly 70,000.
Analysts have explored possible reasons that this might be the case. One major reason could be the decrease in sales volume in even the major NFT collections. Further, others who are crypto-native buyers have entered the market of sales less and buy pieces that are lower-ticket. It could also be an indication of more people who are entering the crypto market in a more casual fashion.
There are numerous online marketplaces where one can purchase NFT works, and NFTs reach different valuations on different platforms. Some marketplaces such as OpenSea and SuperRare are dominating higher-end sales (average daily sale prices are in the $30-60,000 range), but SuperRare stands out with above $100,000 sales more regularly. This sets the two markets apart, although OpenSea is the most popular NFT marketplace holding 97.8% of the total trading volume.
Knowledge about how to use various cryptocurrencies is also a factor, as many sales are carried out in Ethereum. NFTs such as Cryptopunks were significant in the late summer peak in Ethereum-led NFT sales.
While some NFT marketplaces do require background knowledge on topics like the use of various cryptocurrencies, there are platforms that provide a great starting point for those looking to enter the NFT market. In regards to NFT art, ARTESSERE’s ArtChips platform offers a way for art-enthusiasts to participate in NFTs by owning a portion of a physical or digital art piece via NFT, accompanied by a high-end physical copy of the work as well as various member perks. Fitting a variety of tastes and price ranges, all art on the ArtChips platform has been pre-approved by art experts, and provides a combination experience between the burgeoning NFT world and new, up-and-coming artists.
Word about NFTs is spreading and currently the recent NFT.NYC event has attracted buyers to these online marketplaces thanks to advertisements in Times Square and celebrity discussion on online platforms such as Twitter. Even though the daily sales volume has decreased, this decline has not negatively affected the NFT market. As more players enter the NFT market, it is likely that these trends will continue (with an increase in unique buyers and a decrease in sales volume), but it is also likely that these sales will attract further rules and regulations.
From the standpoint of democratising the art market, the increase in the amount of more casual buyers could be a huge positive, with buyers investing in specific artists and their work, rather than just the high-level NFT trends. It could also illustrate that the market is widening, with more people from different backgrounds interacting with the cryptomarket.