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Crypto Market Sell-off Delivers NFT Trading Volume Boost

Cory Russell

Apr 13, 2022 10:06


The crypto market sell-off has aided the growth of OpenSea NFT trading volumes.

Trading volumes on OpenSea fell in February and March as the crypto market rose.

As more mainstream businesses join the NFT area, the prognosis for the NFT market remains positive.

NFTs and OpenSea had a strong start to 2022, with trade volumes reaching an all-time high in January. The upward trend provided a positive picture for the next year.

ETH trade volume reached $4.97 billion in January, according to Dune Analytics statistics. The previous all-time high for OpenSea came in August, when trade volume reached $3.42 billion.

However, the crypto market's recovery from late January lows to early April highs was underwhelming in February and March.

Conditions in the NFT market look to be improving, with the recent crypto market sell-off providing support.

Trading on OpenSea with ETH under $3,000

March saw $2.49bn in ETH-based NFT trading volumes, down from $4.97bn in January and $3.58bn in February.

ETH trading volume is at $1.30bn. A continuing ETH decline would encourage demand for NFTs, notwithstanding the lack of a straight line.

After a January low of $2,161, ETH hit $3,500 in April before slipping down to sub-$3,000. ETH has declined in 6 of 9 sessions, with ETH-based NFT trading on OpenSea returning to sub-$3,000.

Because NFT trade volumes for Polygon (MATIC) and Solana (SOL) are so small, ETH remains the major emphasis.

This month's active traders have risen. From 546,145 in January to 451,767 in March, active ETH-based NFT traders. This month, there were 281,546 active ETH-based NFT traders.

Active traders may reach January's all-time high, boosting OpenSea and NFTs.

Beyond ETH Value's Influence on Trading Volume

Competition, illegal conduct, new NFT launches, and regulatory scrutiny will all have an impact on OpenSea trading activity.

LooksRare (LOOKS) debuted in January this year, and Coinbase is ready to join the NFT field via CoinbaseNFT.

Acceptance of fiat money as a form of payment will be a last important driver for NFT transaction counts. Coinbase and Mastercard announced a cooperation at the start of the year that would enable mainstream payments for NFTs.

The ability to accept mainstream payments eliminates the need for potential NFT collectors to open digital wallets and acquire cryptocurrency under risky market circumstances. The move by Coinbase to accept Mastercard payments may drive other NFT markets to do the same.

The good news for the NFT industry is that major corporations are continuing to investigate and join the digital asset market. Investors will be watching how Solana-based NFTs work for OpenSea.

However, there are also downside concerns, such as illegal activities and increasing governmental supervision. Regulatory monitoring must be helpful rather than punishing in order to make the NFT market more accessible. The actions of regulators on NFTs may be connected to unlawful activities in the NFT sector.