For the Love of the Game (Market Commentary) |
October is known in the crypto world as an “up only” month, thanks to Bitcoin’s historically excellent performance. Other than 2018 and 2019, bitcoin has finished higher every October since 2013. While many are hoping NFTs will see a similar trajectory play out this year, history tells us to cancel our party plans and to plan for Floptober instead. We already know that the second half of the calendar year is the Mr Hyde to the year’s Dr Jekyll, with NFT sales and value falling straight off a cliff. October is no exception to the rule as
evidenced by the past two years in NFTs. 2021 saw NFT sales fall -8.7%, from $4.2b in Sept 2021 to $3.8b in October. Average sales prices also fell 28% between months, from $557.12 to
$400.22. In 2022 we saw a similar story unfold with sales falling 12.5%, from $643m in Sept 2022 to
$562m in October. Average sales prices however increased 10.4% from $76.63 to $84.66. At the macro level, the Forkast 500 NFT Index
reflects no difference in the loss of value in September 2022 and October 2022, with the NFT market losing just over 7% of its value each month. Last year, October served as a bookend for the year’s six-month slide, but
ultimately, both 2021 and 2022 needed a catalyst for the market to reverse. 2021’s end-of-year $SOS airdrop injected much-needed liquidity into the market and put an end to three consecutive months of declines. FTX’s collapse in
November 2022 brought lower crypto prices and a bit of a rallying moment for NFT collectors. While the value of NFTs plummeted -24.57%, total sales increased 9.25% to $614m.
NFTs largely move independently of the crypto markets, or maybe even opposite. Cheap crypto means discounted NFTs, so higher-priced crypto means more expensive
NFTs. With NFTs still feeling overvalued, Uptober in crypto almost certainly spells bad news for NFTs this month. Until we see fresh liquidity injected into the market or another catalyst, we'll see the previous 2-year trend continue in NFTs, and Uptober will be Floptober once again in NFTs. No FUD, just FACTS, last week’s $58m in cross-chain sales reflects the lowest week of sales we have seen in 2023. And total transactions? Same story there.
It’s not all bad news though. While the low sales puts the NFT market on par with February 2021, buyers, sellers, and transactions reflect the true growth of the NFT economy, mostly up this
week, and outpacing early 2021 exponentially. It’s the completed month of September that is more eye-opening, with its $294m in total sales representing the lowest NFT sales since January 2021.
- DMarket gaming
skin dominance continues, this week having the benefit of the legendary game CounterStrike 2 launching.
- Big sales and sweeps in the BAYC collection drove sales up 61.97%, with some whale collectors
finding value in the collection when the floor price reached the mid-20 ETH range.
- Beeple threw a party for CryptoPunks last weekend, putting the iconic NFT collection front and center,
while showing why people love collecting so much. It’s actually the community.
- Pudgy Penguins were the biggest story last week, announcing that Pudgy Penguin toys and plushies are now stocked in 2,000 Walmart stores
across the USA.
- Ethereum is
the king of the NFT market again, and it’s hard to not notice that wash sales are declining on a weekly basis. Where is that action going? It’s all but confirmed, they have moved to FriendTech.
- Mythos Chain continues to win over more and more eyes as the public is waking up to the fact that CounterStrike gaming skins are being
traded on the blockchain. DMarket again makes up 99% of Mythos Chain’s total sales volume.
- DraftKings again makes up 52% of Polygon’s total NFT sales, and it’s these sales that are helping Polygon
stay ahead of Solana on the weekly collection rankings.
- Solana stands out to me for a less flashy reason but still caught my eye. Their volume comes from multiple NFT collections, all doing
hundreds of thousands in sales weekly. In fact, the top Solana collection, Mad Lads, did $403,735 in sales. That’s just 7% of Solana’s total volume.
- Refik Anadaol, currently
featured on the Las Vegas Sphere during U2’s opening of the sphere, revealed that his WInds of Yawanawa collection will finally have its art revealed next week. Winds of Yawanawa has traded for over $505k on secondary this week.
- Otherdeed Vessels, Otherdeed Expanded and the Koda collections, all playing a role in Yuga Lab’s Legends of the Mara game, each saw sales climb to around $700k, and are up 370%, 135%, and 119% respectively.
- The Museum of Modern Art is getting into NFTs in the latest example of the art world backing the
technology that is empowering artists around the world.
- Gary Vaynerchuck announced that VeeCon 2024 will take place in Los Angeles next August
9-11.
- Proof, the creator of Moonbirds and Grails collections, got bitten by the bear market, reducing their staff by 22 employees in an effort to lean up and survive this brutal NFT winter.
Ah, that all too familiar “smile” pattern on the Forkast 500 NFT Index. At this point we should know what to expect. Some excitement in the NFT community drives buying action in the top 500 NFT collections, and drives up prices. But without any real substance to the hype, we
quickly return back to our macro trend of declining. Floptober is real, and I fully expect for us to head south quickly. Especially now with confirmation that Blur wash traders are moving over to FriendTech.
Have a MEGA GM, and if you’re looking for daily NFT updates, including both NFT news and a market review, check out my new show on
YouTube called Inside NFTs. Just 5 minutes a day keeps you in the loop!
TenebrisVia - Galdricge
Date - October 3
Blockchain - Tezos
Price - 8 XTZ Disney’s Mickey and Friends - Volume I
Date - October 3
Blockchain - Flow
Price - $39.99
USD WGMeets - ABridged
Date - Oct 5
Blockchain - Ethereum
Price - Auction DC Comics - DCeased #1
Date - Oct 5
Blockchain - Palm
Price - $9.99 USD Disney - Dracula
Date - October 6
Blockchain - ImmutableX
Price - $6.99 USD Joy Division - CP1919
Date - Oct 9
Blockchain - Ethereum
Price - $100
USD
|
One of the most important features of NFTs is their utility of preserving a
full record of a digital item. I’m talking about its birth on the blockchain, its transaction history, who created it, who held it, and how long it was held each step of the way. This provenance matters much more than people realize, especially in the upcoming age of AI, deep fakes, misinfo, and scams. Dive in to learn more about what type of provenance NFTs preserve, and level up your understanding of why blockchain tech is so game-changing. Happy researching! Received this from a friend? Sign up for this twice-a-week CryptoSlam VIP newsletter. |
|
