The recent resurgence in the Non-Fungible Token (NFT) market during October marks a significant shift from the prolonged downward trend experienced over the past year. DappRadar, a prominent crypto data firm, reported a notable 32% increase in its trading volume, rising from $306 million in September to $405 million in October. This surge brought the trading volume back to levels seen in August, indicating a substantial recovery in NFT market activity.
NFTs witnessed an increase in trading volume in October
The years 2021 and early 2022 witnessed an NFT craze, driving up valuations and sparking immense interest in digital collectibles. However, the current year has been a more challenging period for certain sectors within the collectibles space, particularly in the realm of profile picture (PFP) projects. Even well-established collections like Yuga Labs’ Bored Ape Yacht Club (BAYC) have felt the effects of a cooling market amid the extended crypto winter. Yet, within this landscape, signs of a possible upturn within the broader digital assets sector have emerged.
October’s surge in NFT trading volume correlated with Bitcoin’s price surpassing $35,000, reaching its highest value in 16 months. This upward momentum was largely driven by anticipations surrounding a potential approval of a spot Bitcoin ETF in the United States, a development that has drawn keen attention from industry analysts. DappRadar’s comprehensive report also highlighted the growth in its trading volume on the Solana network, which experienced a 15% increase from $24 million to $27.6 million throughout October.
Challenges in the sector amid promising indicators
Simultaneously, the price of Solana itself surged by a notable 65%, rising from $23 to approximately $38, according to CoinGecko. The report encompassed the trading volumes of collectibles across a spectrum of blockchains supporting these unique digital assets. Ethereum, the second-largest cryptocurrency, saw a striking 50% increase in collectibles trading volume, reaffirming its lead among all networks, as outlined by DappRadar. The surge in the trading volume was accompanied by a proportional increase in the floor price.
The floor price of a collectible is the minimum listed price of a NFT on secondary marketplaces—for popular PFP projects. For instance, the floor price of NFTs from Bored Ape Yacht Club rose from $40,000 worth of Ethereum to approximately $55,000. Notably, certain PFP projects boasting substantial market capitalizations experienced an upswing in their prices, a trend noted by Punk9059, director of research at startup Proof, who recently dubbed the trend as the arrival of “Uptober” on Twitter.
However, despite the promising surge in trading volume, the $405 million in trading volume throughout October is notably lower compared to the $2 billion exchanged in March, indicating a significant decline in overall NFT sales. Moreover, although the overall number of NFTs sold decreased by 5% in October, dropping from 3.58 million in September to 3.4 million last month, the decline was less severe than the 290,000 drop in NFT sales observed in August, according to DappRadar. However, despite this uptick, the overall volume and number of NFT sales remain notably lower than previous peaks, painting a mixed picture of the NFT market in the given month.