OpenSea’s trading volume is down 99%, here’s why!
OpenSea, known to be the worlds biggest NFT marketplace at the moment, seems to be experiencing a big drop not only in amount of users but also in daily trading volume.
According to recent data compiled by DappRadar, as of August 28, OpenSea saw around $5 million worth of ETH traded on their platform, a considerable drop from their all time high trading volume of $400 million back in May 1st of this year.
NFT transactions on Opensea:
May 1, 2021: $405.7 million (record high)
Aug 28, 2022: Less than $5M
— Darren Rovell (@darrenrovell) August 31, 2022
In terms of general NFT transactions, whether it be ETH or SOL, the OpenSea platform is reported to have recorded only around $9.24 million worth of transactions this August in comparison to the $2.7 billion recorded on May 1st.
Aside from that, OpenSea’s daily user count has also fallen dramatically from a recorded ~58,000 users in January to just ~23,000 in August.
Reason For The Drop
There could be a number of reasons as to why the trading volume on OpenSea dropped so dramatically in the span of less than a year, one of which could be related to the issues surrounding OpenSea’s policies.
From June up to August, many complaints have been made in the community surrounding OpenSea and their ‘broken’ flagging system, which would often cause hundreds of NFTs to be marked as stolen and therefore unable to be resold.
However, in early August, the OpenSea team has shed light on the issue and promised to community to make some changes that will solve these issues.
Another reason why OpenSea’s trading volume is now so low could also be due to the current crypto winter and bearish crypto market that we’re seeing.
Due to the macroeconomy, the crypto market has been seeing massive losses and downtrends, with the most recent one being this late August after announcements of raising interest rates.
With Ethereum, the second biggest cryptocurrency in the market being the main crypto used to trade NFTs on the platform, the fall of Ethereum recently seems to have also impacted the enthusiasm of buying NFTs as well.
However, since Fortune reported on this issue not long ago, an OpenSea spokesperson has stepped up to say that they do not fully agree with DappRadars’ data compiling methods, meaning that the claim that OpenSea saw a 99% drop may not be completely accurate.
This spokesperson told Fortune, “We’re playing the long game because we see what’s possible, so we’re not that concerned about short-term volatility. We always expected frothiness, hype, and deflation as the community and use cases evolve, the tech gets more sophisticated, and creators figure out how to build more utility into their projects.”