The non-fungible token (NFT) market experienced its weakest quarter in approximately three years during Q3 2023, according to a report from Binance Research.
In this challenging period, NFT sales in Q3 accounted for $299 million, with the decline attributed to a dip in the price of ether (ETH) and a general decrease in floor prices across most collections.
Dismal Sales Quarter
Researchers at Binance noted that September was particularly dismal for NFT sales, marking the sharpest decline since January 2021. Major collections like Azuki, Bored Ape Yacht Club, and Mutant Ape Yacht Club saw their floor prices drop by more than 25% compared to the previous quarter. Gaming and metaverse-related NFT collections were hit the hardest, experiencing a decline of over 40%.
The average sales price in September was $38.17, which was a significant drop from the peak of $791.84 seen in August 2021. Furthermore, the average number of daily unique NFT buyers fell by 14% compared to the previous quarter, reaching approximately 53,000. These declines were attributed to a challenging market environment and low liquidity.
Ethereum and Immutable Gain Ground
Despite the overall drop in NFT sales volume in Q3, Ethereum and the layer-2 scaling solution Immutable saw increases in market share. Ethereum saw a 6% growth, while Immutable experienced a 4% boost. Immutable, which hosts popular blockchain games like Gods Unchained, topped the chart for sales count in Q3.
Gaming-related NFTs gained popularity, with the top five collections by transaction count being Gods Unchained, Axie Infinity, NBA Top Shot, NFL All Day, and Mythical Beings.
Analysts pointed out that despite the decrease in sales, Q3 saw overall growth, likely driven by lower fees and more moderate ETH prices.
Q3 Crypto Market Overview
From a broader perspective, the total cryptocurrency market capitalization declined by 8.6% in Q3, despite subsequent rallies following legal victories for Ripple Labs and asset management firm Grayscale.
Crypto fundraising activity also dwindled during the quarter, registering the lowest amount raised since Q4 2020, with fundraising rounds and raised funds falling by 24.9% and 21.4%, respectively.
On a more positive note, Bitcoin (BTC) posted year-to-date gains of 63.1%, partly driven by the buzz around spot Bitcoin exchange-traded fund (ETF) applications from major traditional finance players. Other assets, such as Ripple (XRP) and Solana (SOL), also experienced significant gains. Institutional adoption continued, with top traditional companies testing the waters of the crypto space.
