NFTs sales volume surged in February to reach highs that haven’t been seen since the onset of crypto winter last spring.
According to a report from DappRadar, NFT trading volume surpassed $2.04 billion last month — up 117% from $941 million in January. This makes February the best month for NFT sales since May 2022, when Terra’s crash plunged the crypto and NFT markets into a frigid winter.
However, there’s some controversy over the reason for the surge. Some are accusing nascent NFT marketplace Blur, which made headlines last month for surpassing the top NFT marketplace OpenSea in trading volume, of incentivizing wash trading — the process of flipping NFTs between the same wallets to inflate prices.
Blur burst on the scene last month by offering financial rewards to users for refraining from trading on other platforms and for trading as many high-value NFTs as possible. The result was a $1.13 billion increase in trading volume in February from the previous month. The numbers made headlines in the NFT space, but data reveals most of the increased volume came from a small number of whales flipping NFTs to accumulate BLUR tokens.
The current controversy is whether Blur’s trading should be counted as legitimate volume. If it isn’t, then February’s trading volume would be similar to the month of January.
Some data analysis platforms like CryptoSlam have already stated they are removing $577M worth of Blur trades from their market data. DappRadar, on the other hand, is counting the trading volume as legitimate — although they are looking into flagging some Blur trades as wash trades.
Blur aside, OpenSea continued to make progress in February. Its trading volume increased by 18% to $587.22 million, and it also retained significantly more traders than Blur, with 316,000 to Blur’s 96,000. Much of OpenSea’s success in February can be attributed to Dookie Dash, a skill-based game from Yuga Labs that resulted in a winning NFT Key being sold for $1.63 million in ETH.
Excitement Around NFTs is Growing
Despite the controversy surrounding Blur, the surge in NFT sales in February is big news for the NFT space. The news confirms what many people have been feeling: that excitement for Web3 and NFTs is growing in 2023. At Rarity Sniper, we’ve covered several stories recently that back up this theory. Here are some of the top headlines.
First, Mythical Games teamed up with the NFL to drop a series of NFT player packs ahead of Super Bowl LVLL. The “Super Bowl LVLL Rivals” included 22 new NFTs from players from the Philadelphia Eagles and the Kansas City Chiefs.
Next, the layer 2 blockchain Polygon saw a surge in sales on OpenSea and the rise in price of its native $MATIC token. On February 8th, the network recorded a jaw-dropping daily trading volume of over $11.4 million on OpenSea.
Lastly, the new CEO of YouTube Neal Mohan is bullish on NFTs and Web3. Last year, Mohan published a blog post that said the company was looking for ways to integrate Web3 technology like NFTs and the metaverse onto the platform. He believes blockchain technology can help “creators build deeper relationships with their fans.”
No one can say what the future holds for the NFT space, or if Blur will continue to put up big numbers that the market deems legitimate in the months to come. But if February’s NFT sales volume numbers prove anything, it’s that the NFT space is once again alive with activity and excitement.