Is Opensea fizzling out?
NFT transactions on Opensea, one of the largest NFT trading platforms, has dropped 99% in 4 months.
Opensea is a NFT marketplace and makes money by taking a cut from transactions.
More transactions means more revenue.
On May 1st, OpenSea processed ~$2.7b in transactions.
On 28 Aug, OpenSea processed ~$9.34m in transactions.
Over the same time, OpenSea has lost about 1/3 of its users.
“Meanwhile, OpenSea’s daily user count has fallen from 58,870 on January 9th to just 23,620 on August 27th. Daily transactions fell from 137,500 to just 53,300 across the same timeframe.”
That is definitely not looking great.
There are a few possibilities.
If you didn’t notice, its crypto winter now.
Tourists have left town, markets have tumbled, prices of cryptocurrencies have tanked.
This means general interests towards crypto have been crippled.
The crypto market generally follows Bitcoin’s lead.
When BTC rises, everything follows.
When BTC falls, it typically indicates a bad downturn for everything else too.
Floor prices for even the top-tier NFTs have taken a huge hit.
Bored Apes, Cryptopunks and Azukis have all went down in value considerably.
Maybe during a recession, people sell their assets to have cash on hand.
Volatile assets like crypto and especially NFTs are usually the first to go.
So only the steadfast and convicted will stay.
Or perhaps the NFT bubble has finally burst!
One could also entertain the thought that NFTs are intrinsically value-less.
And finally the markets have come to their senses and people have stopped believing in them.
Well, it happens to ALL industries, markets and ideas.
Anything new and non-traditional will be questioned, smirked at and challenged.
Give em time.
Let’s see where the road goes.
We all know 99% of NFTs out there are scams, rugs, lousy, money grabs and poorly designed.
So why are we surprised when trading volume on one of the biggest NFT exchange out there drops 99%?
We should rejoice to see the bad eggs being filtered out.
NFTs are a bit more interesting than your typical assets.
Besides the value we give to each NFT, keep in mind, we trade NFTs with ETH (most of it anyways) and other cryptocurrencies, which also holds value in and of itself.
So when the bear market strikes, the value of cryptocurrencies and NFTs both tanks.
That’s a double blow.
But I am a believer that Opensea is on the right path and when the markets turn green, they would be poised to reap the benefits as they did previously.
If they reduce their burn rate, keep the boat steady, continue investing properly in R&D, keep improving their tech and moat, they will be able to ride out the storm.
Do you believe in NFTs?
Do you absolutely convinced of the bright future that NFTs can proffer?
Then perhaps its time to go shopping for some “distressed NFTs”.
Will NFTs boom again?
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