Rising Strong: The 2023 NFT Market's Victory Amidst Woes (2024)

NFT Industry News February 1, 2024

Even though there were significant downturns in the global NFT market during 2023, the community remained unshaken, laying the foundations for a stable bounce back by the end of the year.

A thorough investigation by the NFT research firm ‘NFT18‘ reveals the NFT market’s resilience in 2023: despite a 62% fall in volume to $10 billion and nearly a billion dollars in losses, active wallets only dipped by 10%, showing significant signs of recovery.

Trading Performance and Global Shifts in 2023

In 2023, NFT trading suffered a massive loss of over $1 billion, coinciding with a “market correction” phase and a negative Rolling Stone article claiming “NFTs are dead” not helping matters.

Nonetheless, the final quarter of 2023 displayed promising signals, with the proliferation of sidechains and other blockchains aside from Ethereum, such as Polygon, Solana and Bitcoin. Many NFT projects are now expanding multi-chain, taking advantage of the opportunities each network offers.

Global NFT interest notably shifted from the West to Asia, the Middle East, and Southeast Asia, bolstered by a $100 million boost in Asia’s blockchain gaming and numerous Web3 events, like FinTech Festival Asia.

NFT Marketplace Volatility

Additionally, shifts were observed in the market’s leadership dynamics as the NFT marketplace Blur overtook OpenSea, which had a registered trading volume of $19 billion the previous year.

Despite this shift, Blur’s swift rise has been scrutinized due to over 50% of its USD volume being deemed questionable. Still, OpenSea barely managed to hold onto its highest ranking because of this.

Wash trading caused alarm as it made up an unsettling 44% of the market. Close to $2.86 billion of dubious trading volume stemmed from Blur, predominantly in 2023’s first quarter.

Regardless, genuine trading volume still took precedence, with OpenSea and Blur recording $2.7 billion and $2.4 billion, respectively.

A Breakdown of NFT Markets

Despite the overall market conditions, some segments still thrived. Collectibles saw a 13-point growth compared to 2022, contributing to $6.3 billion or 76% of the total traded volume. Conversely, the art segment witnessed the most drastic slump, with a 17-point drop.

NFT18 has been scrutinizing NFT markets since 2018. The company’s comprehensive research offers priceless insights into the rapidly transforming NFT landscape, shaping strategic steps for businesses venturing into this innovative sector.

The report highlights the NFT market’s resilience, driven by community involvement, noteworthy changes, and technological progress — each of which indicate a promising NFT resurgence in 2024 and beyond.