NFT Trading Activity Is Up 166%
Positive price dynamics in the cryptocurrency market and the approval of spot Bitcoin ETFs have influenced a significant increase in NFT trading activity. Will 2024 be a period of renaissance for the NFT and dApps sector?
2023 impacted the NFT and dApps sector positively
According to a report by DappRadar, NFT collections generated increased interest last year as trading activity jumped 166%. The Blur trading platform ranked first in terms of trading volume. The site's year-to-date dominance stands at 56%. Meanwhile, OpenSea ranks first in terms of number of traders, with 280,000 monthly active users.
Despite this significant increase, digital collectibles prices did not come close to the 2021 figures.
Throughout 2023, there was a decline in NFT prices. Trading volume fell 49% to $12.6 billion. The low price performance was the catalyst for an increase in the number of NFTs sold. The number of NFTs sold increased 445% to 60 million.
The number of active unique wallets in the dApps sector grew 124% by the end of 2023. The growth leaders are platforms such as Near, Klaytn and Arbitrum. KAI-CHING, SuperWalk, and Uniswap V3 have increased their user base. While Solana, Hive, and Harmony saw a decrease in engagement. Reasons ranged from exploit and FTX connection to financial difficulties. Overall, DappRadar recorded around 3,000 decentralized apps last year. Most of them belonged to the gaming sector.
NFT industry believes in a bright future
Investor appetite for NFTs continues to grow. Cypher Capital said that the adoption of Bitcoin through the approval of exchange-traded funds will indirectly influence the development of alternative assets such as NFTs. This view is supported by Oscar Franklin Tan of Atlas Development, also citing the development of Ordinals. By the way, Ordinals sales last month totaled $800 million, indicating an increased focus on Bitcoin-based NFTs. Tan emphasized that the next leap for the NFT industry hinges on the potential approval of the Ethereum ETF. This will bring attention back to the original Ethereum-based NFTs such as BAYC and CryptoPunks. Nicegram believes that the current regulatory developments in the crypto industry will help the NFT sector achieve proper adoption faster.
The driving force behind NFTs this year will be their quantity. Brands will prioritize producing more NFTs and selling them at more affordable prices, targeting the broad consumer market. The market has already seen the prerequisites for this with brands such as Nike and Starbucks. This approach will lower the threshold of entry, which will only bring the digital collectibles' industry closer to acceptance.
Overall, experts are confident about the growth of NFT in 2024. As for NFT games, this sector will take longer for adoption. Another report by DappRadar talks about Web3 games that will dominate in 2024. They all involve improved gameplay, graphics, and tokenomics in one way or another. Unlike other Web3 trends, blockchain games attract users not so much for the quick opportunity to earn money, but for the elaborate game mechanics. MixMob believes that 2024 will be a period of learning from the mistakes of first-generation blockchain games such as Axie Infinity. Like the traditional video game industry, Web3 games also need more time to develop, MixMob believes. And unlike trends in the NFT industry, the bets will be placed not on the quantity of games, but on their quality.
