According to data by DappRadar, non-fungible token (NFT) sales volumes soared in February to highs not seen since the Terra crash last Spring.
Quick Take:
- Last month, NFT sales volumes surged to the highest levels since the crypto collapse last Spring.
- Emerging NFT marketplace Blur is responsible for most of the recent rise in the NFT market due to its customer loyalty incentives and high-value NFT trading.
- However, there are concerns about market manipulation and wash trading in the NFT market, with some attributing Blur’s popularity to such practices.
Top Causes of Last Month’s NFT Rise
Last month, trading in the NFT market exceeded $2.04B, showcasing a 117% increase from January’s $941M. Thus, making February the most successful month for NFTs since Terra’s downfall last May, causing the crypto collapse.
Despite OpenSea modifying its creator royalties, this recent rise boils down to one controversial source – Blur. The emerging NFT marketplace continues surpassing OpenSea in trading volume. One of the main reasons includes offering customer loyalty incentives — trading many high-value NFTs as a result.
Blur’s trading volume reached $1.13B last month, accounting for almost the entire NFT market’s month-over-month gains. Although, a small number of NFT Whales are also to blame for the significant volume, flipping NFTs back and forth to accumulate BLUR tokens.
Of course, such movements have caused controversy, with Cryptosmack, among others, saying Blur’s popularity stems from “market manipulation”.
Another issue includes Wash Trading. Traders are selling NFTs back and forth on Blur — sending them to their wallets at inflated prices to inflate the market value of such digital assets.
Nevertheless, despite Blur’s popularity, it’s not all bad news for OpenSea. The marketplace continues to chug along, thanks to the popularity of Bored Ape Yacht Club’s Dookey Dash game.
The sales of blue-chip digital collectibles also play a significant part in the secondary marketplace‘s success.
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