Non-fungible tokens (NFTs) on the Ethereum blockchain are making a comeback, reaching their highest trading activity across all marketplaces in six months after recently hitting a two-year low.
Total NFT trading volume for the week ending Monday, December 4, exceeded 105,000 ETH, an increase of more than 250% since the week ending October 9, according to Nansen data. A local trough in early October saw the lowest recorded level since July 2021, just before the first explosion in NFT trading.
These trends may indicate an end to the NFT winter.
Data from CoinGecko shows that CryptoPunks, one of the first major NFT collections, has seen a nearly 45% jump in its floor price over the past 30 days to 57.24 ETH. However, this is still far from the all-time high of 125 ETH.
The boom since October suggests that “the market basically agrees that NFTs have bottomed,” wrote Will Sheehan, CEO of blockchain analytics firm Parsec, to Unchained on Telegram. The Punks rally was equivalent to a BTC rally for the NFT market. Now you see pockets of net buying in NFTs, Pudgies being the most notable, but in general liquidity and attention in NFTs has turned,” Sheehan said.
The spike in NFT trading coincides with ETH’s rise to around $2,200, a price point that hasn’t been seen since May 2022. “Much of the increase in NFT trading volume has to do with ETH’s price movement,” Cameron Thompson, community manager and editor for NFT gallery Tonic, wrote in an email to Unchained. The 20% increase in ETH over the past month has not only driven the buying and selling of NFTs, but has also reinforced positive sentiment around tokenized collectibles – sentiment that has not been felt in the Web3 community in many months.
The majority of NFT trading volume these days takes place on Blur, the leading marketplace tailored for high-frequency traders, which launched in October 2022, with former market leader OpenSea in second place.
Renewed interest and general appeal outside the crypto ecosystem
Carlos Mercado, a data scientist at blockchain analytics firm Flipside Crypto, cited two notable reasons for the increase in trading volumes for NFTs. The first is a renewed interest in “meme” NFTs, such as Pixelmon and Milady. “These often serve as proxies for leveraged ETH, so as ETH rises, the store of value narrative rises,” Mercado wrote to Unchained via Telegram. In the past 30 days, the floor prices of Pixelmon and Milady have risen 210% and 48%, respectively, according to CoinGecko.
The second, Mercado wrote, is the “noticeable success (led by Nouns & Pudgy Penguins) in breaking out of crypto into the broader culture.” In September, Pudgy Penguins debuted its toy collection in 2,000 Walmart stores in the United States. According to OpenSea’s Pudgy Penguins page, over the past 30 days, volume has increased 114 percent to 15,770 ETH, while the number of sales has increased 58 percent to 2,267 and the floor price has increased 83 percent to 9.7 ETH.
Data from blockchain analytics firm Nansen shows that Blur’s lending smart contract holds the most Pudgy Penguins, with 477 NFTs, an increase of about 9% in the past 24 hours. The second-largest holder of Pudgy Penguins is a smart contract associated with Flooring Protocol, which fractionalizes NFTs to lower barriers to entry for new participants.
Pseudonymous Blur co-founder Pacman did not respond to a request for comment at press time.
