NFT market shows signs of recovery as January trading volumes hit 7-month high • TechCrunch

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It seems that the NFT market is slowly getting back on its feet. Trading volumes rose for two consecutive months, with January scoring the highest volumes since June last year, according to the Dapp Industry Report: January 2023.

The growth in January marked a sharp departure from the trend of recent months – October saw trading volumes drop to a low of $662 million – but in November the market halted the downward trend to hold at $662 million, according to the report.

Volumes then recovered in December, rising slightly to $683 million, increasing 38.5% from that figure to $946 million in January.

A number of blockchains allow traders to buy and sell NFTs, but Ethereum has held the leading position with over $36 billion in sales over time, data from NFT aggregator CryptoSlam showed. In comparison, Ronin and Solana – the second and third largest blockchains by total NFT sales volume – had about $4.2 billion and $3.7 billion, respectively.

January was strong for both Ethereum and Solana, which had trading volumes of $659 million and $85 million, respectively.

Image credit: DappRadar (opens in new window)

February shows signs of continued strength as well – at least so far. As of February 3, the Ethereum blockchain had sales of $26.5 million to more than 25,500 unique buyers, according to CryptoSlam data.

While Ethereum accounts for the lion’s share of trading volumes, with more than 78% of all trades on the blockchain, Polygon had the largest influx of traders in January, the report showed.

Polygon’s trading volume grew 124% to $46 million in January from $20 million in December. In the past week, NFT sales volume on the blockchain grew by 43.5% to reach $2.8 million, indicating continued interest in the blockchain.

In late December, two major Solana NFT projects, DeGods and y00ts, said they would leave the blockchain in 2023, sparking mixed feelings in the community. DeGods said it would migrate to Ethereum, and y00ts plans to move to Polygon.

“At the beginning of the year, we noticed that a lot of the creative economy’s attention was focused on ETH and Solana,” Ryan Wyatt, CEO of Polygon Studios, previously told TechCrunch. “That’s why we decided to go against the trend and focus on the untapped potential of web3 by integrating big corporate brands, DeFi platforms and gaming companies. We did this successfully through ecosystem fund investments and white glove partnership support.”

As major NFT pools such as DeGods and y00ts diversify their alliances into blockchains, it may also draw in other holders seeking new opportunities or seeing value elsewhere.

The subsequent growth over the past couple of months may also point to a broader upward trend across the crypto market. It could also potentially help drive creators and projects to form new uses in the NFT world as they try to capitalize on the bullish marketplace.