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Are we entering an NFT downturn?

The market for non-fungible tokens, or NFTs, may be slowing after NFT activity grew sharply in 2021 and into the new year.

The health of the NFT market is itself a fascinating data project. The historical volatility of the price of crypto tokens and other blockchain-based assets is high, which means that you might be fooled into calling a trend early, only for the markets to reverse and make you look silly.

In the crypto world, it’s good sense to never say never.


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And yet, we’re content to highlight a number of data points that indicate that the NFT market is slowing along a number of axes, indicating, at a minimum, that growth in the hot sector has come to a halt. This is not merely an academic point; there are a host of startups in the NFT space, meaning that there is an ocean of venture capital and illiquid private-market equity floating in projects directly or indirectly tied to non-fungible token demand.

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The startup point is what we care the most about, of course, and there are more players in the space than merely OpenSea.

So let’s comb data from the Dune platform – more on that company and its recent fundraise below – and other sources to get a handle on NFT activity. We’ll also loop in Coinbase NFT comments from its latest earnings call and try to reach something of a conclusion for where the NFT market is today — and what that means for upstart tech companies hoping to surf singular blockchain assets all the way to the public markets.

What does the data say?

When we consider NFT volume, the leading indicator is OpenSea. The well-funded unicorn startup has proved an early leader in the NFT market, with a commanding market share. So when we look at OpenSea data, it can give us a strong, if imperfect, indication of where the NFT market is itself.

We’re largely leaning on Dune data today. Dune is also a unicorn startup, having raised a $69.42 million round earlier this year. That funding event gave Dune a $1 billion valuation. In short, Dune is an analytics platform for blockchain data offering both free services and paid accounts. It has risen to prominence in the crypto community for its data depth, as well as the fact that its information is easily queryable and saveable in publicly available dashboards created by its community.

One such dashboard was compiled by Richard Chen, an investor at crypto venture group 1confirmation, which centers on OpenSea data, allowing us a look into the platform’s volume. For example, observe the following: