The introduction of a spot Bitcoin Exchange-Traded Fund (ETF) by a major asset management giant in the United States since June 2023 has led to a significant price surge in crypto assets. Since then, the trading volume and interest in non-fungible tokens (NFTs) have been relatively low compared to other assets in the market.
Ethereum NFT market experiences interest from traders
Since the approval of the Bitcoin ETF, the overall cryptocurrency market has experienced continuous declines. Amidst this, it was observed that the trading volume of the Ethereum NFT market continuously surged, reaching $42.8 million on January 18, 2024. This level had yet to be seen since the end of June of the previous year when the cryptocurrency market was on the rise following the ETF application.
Furthermore, on January 19, 2024, the Ethereum trading volume plummeted to $30 million. However, upon examining the trading volume of Ethereum NFT over the last three months, it is evident that it has been consistently increasing. As of October 21, 2023, the NFT trading volume was at $8 million, and now it has surged by 400%, reaching over $30 million.
However, in the past week, traders highly preferred two NFT marketplaces, namely OpenSea and Blur, out of the 10 available, which include Element, Gem, LooksRare, Sudoswap, Foundation, and others, to generate this significant volume.
Reason for NFT’s lower trading volume
The reason for the low NFT trading volume is the continuous fall of NFT traders over the past two years. As of January 17, 2022, the number of NFT traders was around 248,000, but according to the data available on January 8, 2024, the number of traders has significantly declined to only 61,508. This substantial decrease in the number of traders has caused the overall NFT market to plummet.
However, in the last three months, the number of these NFT traders has remained nearly constant, and it is evident from the data that traders have only two favorite marketplaces: OpenSea and Blur. Most traders prefer only these two platforms.
Besides the NFT market, the overall cryptocurrency market is struggling to gain momentum. Top cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and many others have not experienced any significant moves following the approval of the Bitcoin ETF. Looking ahead, as we approach the Bitcoin Halving, we may see a bullish momentum.
