The NFT sector is gaining more popularity and global acceptance. The concept emerged after the decentralized finance (DeFi) craze created a buzz with its value proposition.
leading venture capital firms, model And Andreessen Horowitz NFT has embraced, increasing its recognition, use, and investment. However, the number of short coin token holders is currently on the rise. NFTGo reported that the total number of sellers in April 2023 exceeded the number of buyers.
The non-fungible token market is dominated by sellers in 2023
NFT Go, an analytics platform, reveals that there were only 7,907 buyers compared to 8,641 sellers on April 26. Previously, the market fell to its second lowest point in the past 12 months on April 19 with only 5,893 buyers.
It closely reflects the June 18, 2022, low value of 5343 Buyers. These numbers indicate lower demand for NFTs which may reduce the value of NFTs to sellers.
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Co-founder of Canary Labs, Ovi Faroukreacting to the buyer’s rejection in a tweet. He stated that the number of day traders ranged between 20,000 and 60,000 last year. However, in the past few days, there has been a decline. Farouk believes that the market is not working at the moment.
The reason for the collapse of SVB is behind the drop in NFT trading volumes
According to the data platform, DappRadarNFT trading volumes ranged between $68 million and $71 million before Silvergate Bank (SVB) collapse. However, it crashed to $36 million after crashing on March 12, 2023.
Also, the number of daily NFT sales decreased by 27.9% between March 9 and 11. According to this report, only 11,440 NFT traders were active on March 11th. This represents the lowest number recorded since November 2021.
DappRadar is to blame Unscrew the peg affiliate USD currency (USDC) to $0.88 as the event that took traders’ attention away from the market. However, despite the recession, the market value of some high-value groups has not been significantly affected. These groups include Bored Ape Yacht Club (BAYC) and CryptoPunks.
NFT laundering deals increased
NFT trading surged in February in the six largest NFT markets pushing total trading volume to $580 million. Queen Gekko Reports indicate that February 2023 heralded a 126% increase over January’s $250 million turnover.
Trade wash It is an illegal activity under the laws of the United States. A trader or bot buys and sells the same cryptocurrency asset multiple times to provide misinformation to the market. The goal is to artificially increase trading volume to attract retail traders which leads to price inflation.
Magic Eden, OpenSea, Blur, X2Y2, CryptoPunks and LooksRare, the top six markets, saw an increase in wash trades. These markets often offer users transaction bonuses as incentives to increase trading volume.
Popular investor and crypto startup financier Mark CubanIn January, it was stated that laundered trading would lead to the next crisis in the cryptocurrency market. He believes that the eventual discovery and removal of laundered trades from exchanges will affect the crypto industry.
Featured image from Pixabay and chart from Tradingview
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