NFT Market in Q3/2022 - Update Information about NFT Market

The majority of 2022 has been bearish, with NFT prices falling to record lows despite a growing number of traditional and web2 businesses entering the industry. However, now is a good time for projects to continue to improve their platform, roadmap, and human resources in order to be better prepared for the next cycle. Let’s find out some interesting insights of the NFT market in Quarter 3/2022.

On-chain Overview

In Q3/2022, the NFT market witnessed many changes in volume and number of users

Quarterly Volume

NFT quarterly volume

Ethereum NFT experienced its lowest trading volume quarter since reaching its all-time high a year ago.

Solana NFT experienced a brief bull run at the end of Q3, with the number of new collections rapidly increasing. Solana NFT, on the other hand, used quantity to compensate for quality.

They may have succeeded when total sales volume surpassed $1 billion for the first time, but the project teams have yet to demonstrate the necessary investments for long-term growth.

Although not a scam, this greatly increases the possibility of a scam and leads investors to invest in NFT solely for the initial profit from flipping the floor price, regardless of how the project performs later.

Quarterly User

In comparison to Q2, there was a slight decrease in Ethereum NFT users. Holders left the market as a result of their concern about the floor price drop, and traders were also more cautious in flipping NFTs.

The number of Solana NFT sellers far outnumbers the number of buyers. The reason could be that the early September hype surrounding Solana NFT left many buyers trapped at high prices with insufficient liquidity to exit.

Furthermore, the fact that the number of sellers has long outnumbered the number of buyers indicates that holders' long-term trust in Solana NFT remains ambiguous.

NFT Market Overview

By 2022, the crypto market will have dropped from $3 trillion to less than a trillion dollars. The non-financial trading market was not exempt.

Profits and trade volumes

First, trade volumes in USD fell by 25% in Q2 2022 compared to Q1. Furthermore, trade volumes fell by 75% in Q3, indicating that fewer NFT-related transactions were initiated between July and September 2022.

The market also saw a 5% drop in volume sales, from 11.45 million in Q2 to 10.90 million in Q3, with Yuga Labs' dominance on the NFT market falling from more than 30% in Q2 to 17% in Q3. The trading volume of Yuga Labs metaverse and PFP. Otherside, and BAYC fell from $2 billion to $182 million in Q3.

Profit for NFT resellers fell "from $2 billion to Q2 $326 million" in the third quarter, while total loss fell from $1.4 billion to around $780 million.

Average NFT prices and holding time

The average NFT price and holding time NFT price fell to $150 in Q3 from $600 in Q2. Active wallets fell by 17% in Q3, to around 120,000 daily transactions. NFTs' average holding time increased by 13%. This could be due to the bear market, which caused falling prices and limited exit liquidity.

NFT Collectibles Remain Strong, but Art and Utilities are gaining ground.

NFT-market-report-q3-2022-USD-volume-traded-by-segment (1).webp

The collectible segment accounts for 60% of the market with over $537 million in trading volume in the third quarter of 2022. With a 52% drop in active wallets, this means that wallets that have collected Collectible NFTs would rather keep their NFT than sell it at a loss.

Meanwhile, the most volume was seen in the Art (14%) and Utilities (13%) segments during this quarter. Only the Utility segment stands out as having a bright future, with asset volume increasing (+44%) and liquidity increasing (+5%).

The NFT Community Remains Active and Encourages Healthier Trading Behaviors

If we take a look at active wallets, we can see that the distribution of on-chain activity is significantly more varied than the volume of USD that is transacted. The Metaverse market has slightly more than 17 thousand active wallets, which is a decrease of 74% when compared to the previous quarter's numbers. Having said that, it is also the market category that has witnessed an increase of 375% in the average number of owners.

NFT Market Breakdown

July

Tencent's NFT Marketplace was forced to close due to legal issues in China.
BAYC's all-time sales reached an all-time high of $2.3 billion.
Expensive collections with a high trading volume; BAYC and Cryptopunks have many million-dollar bid orders.
With only 1800 $ETH in daily volume, Opensea has reached its lowest level since September of last year.
Microsoft refused to integrate it, and NFTWorlds refused to integrate it because of the speculative nature of NFT
Unstoppable Domain raised more than $65 million, bringing the company's valuation to $1 billion.
Kucoin became the first CEX to offer NFT ETF trading.
Optimism launched NFT

August

MagicEden is now attempting to expand from Solana to Ethereum, with its daily volume increasing to $3,911,103 by the end of August, which is 40-50% higher than the average daily volume in July.
The NFT Marketplace War arose as a result of OpenSea's poor policy on frozen NFTs and high royalty fees, which gave rise to smaller competitors such as MagicEden, X2Y2, LooksRare, and the rise of P2P marketplaces such as Sudoswap. However, OpenSea maintains its lead in terms of users and revenue, while Magic Eden and X2Y2 lead in terms of transaction count and volume.
Moonbirds And Oddities now has a CC0 license. This is legal, but the holders are not pleased. They claim that because anyone now has commercial rights, they will be unable to sell their Moonbirds for a profit.

September

Solana NFT trading volume increased as a result of NFT collection y00ts. On September 6th, Solana's USD sales volume surpassed Ethereum's for the first time ever.
NFT Royalties issue occurred after some NFT marketplaces released 0% trading fee including royalties.

Projection

With the Fed continuing to raise interest rates until 2023, Europe's energy crisis, and Europe's finances in trouble, money continues to flee investment markets. There is a high likelihood that there will be no more bull run season in the fourth quarter of 2022, giving us a full year for the bear market.

This will, however, be a good opportunity for those who can afford to purchase high-end NFT collections at extremely low prices. Several million dollar transactions came from the Cryptopunks collection during the first days of Q4.

The major players are still spending money to acquire high-quality large NFTs. Small or unpopular collections are less likely to be noticed, so it is up to these collections to maintain their reputation and price floor until the end of this quarter.

Conclusion

Even so, the NFT market in Q3/2022 underwent a quietest period with no new projects or major news. Macroeconomics has an impact on all markets. However, hundreds of thousands of people are working around the clock to lay the groundwork for NFT's future. Therefore, we have every reason to be optimistic about the NFT market's future.

FQAs - NFT market in Quarter 3/2022

What is NFT?

Non-fungible tokens (NFTs) are blockchain-based cryptographic assets distinguished by unique identification codes and metadata.

How can I buy NFTs?

The majority of non-fungible tokens can only be purchased with Ether. So the first step is to acquire them and store them in a digital wallet. NFTs can be purchased from an online NFT marketplace such as OpenSea, SuperRare, or Rarible.

Are NFTs safe?

NFTs that employ blockchain technology, such as cryptocurrency, are generally safe. Because of their distributed nature, NFTs are nearly impossible to hack. The only security risk is that if the hosting platform goes out of business, you may lose access to your NFTs.

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