The total NFT trading volume tumbled by eight percent in November, continuing the downward trend that began in May.
Analytics firm DappRadar revealed that the entire NFT market had posted $643 million worth of trading in November, down from $702 million in the previous month. In its analysis, DappRadar did not include trades that had undergone "wash trading," a manipulation method commonly used to inflate prices artificially.
Compared to the October drop, which reached around 25 percent, the one in November was less steep yet still significant. The NFT market hit its all-time high trading volume in January, posting $5.36 billion in sales. Due to November’s tumble, the trading volume of NFTs dropped by 88 percent compared to its peak.
NFT trading activity on the Flow blockchain dropped by more than 50 percent to $7.7 million. They had gone down by 60 percent from September to October. Flow’s parent company, Dapper Labs, had to cut off 22 percent of its workforce to adjust to the market.
Ethereum-based NFT marketplace X2Y2 also reported a 50 percent decline in trading volume this November. It posted slightly over $90 million, down from October’s volume of $182 million.
OpenSea, one of the major NFT marketplaces on Ethereum, also saw a decline from $313 million last October to nearly $259 million in November. It was OpenSea’s worst month since June 2021.
Despite a slump in the overall market, DappRadar noted that the trading volume at the Solana NFT space had increased by 42 percent to $95 million.
Most of the trades occurred at Magic Eden, one of the biggest Solana marketplaces. Overall, Solana-based NFT trade was boosted by y00ts, a renowned profile-picture project, which recently revealed its highly-anticipated artwork in early November.
NFT marketplace LooksRare reported that its organic trading volume had doubled last month, reaching $25 million in value. New marketplace Blur also gained its highest trading volume in November at $95 million after posting $39 million in the previous month.
Crypto downfall affects NFT
According to DappRadar data analyst Boris Rebo, FTX’s recent collapse affected the NFT space negatively. Rebo added that the sentiment in NFT investment had been "sour," as shown by a significant decline in unique wallet activities, which were down 42 percent from October.
FTX’s implosion, which allegedly involved misuse of customer funds, created distrust in many crypto entities. Investors have begun to lose confidence in the crypto industry and demand regulation to improve customer protection.
Some crypto companies, including crypto exchange Binance, even had to disclose their financial condition to the public to assure investors that they were financially sound.
Regardless of the situation, some figures in the NFT space said they believed the market could bounce back. OpenSea CEO Devin Finzer said although it might take time for the market to recover, the NFT space could persist and even develop.
"I think for the broader crypto ecosystem, and for NFTs in particular," Finzer said. "This is really an opportunity to invest in strong, continual trust with users."
OpenSea is one of the NFT marketplaces that pay royalty fees to its creators, ranging from five to ten percent of the secondary sale price.