2023-09-01 23:41:32
NFTs are in their ‘astral hell’; volume on Ethereum is the lowest in two years
BlockTrends – The NFT market is going through several difficulties these last few days. Whether in the regulatory realm, or in terms of trading volume, digital cards are getting bad news left and right. It’s worth noting that the bad news is heavily geared toward the art NFT, or PFP, market.
Monthly trading volume for NFTs based on reached its lowest level in two years last month as activity on the OpenSea, Blur, LooksRare and X2Y2 markets stalled.
Trading volume dropped to $407 million in August, according to The Block’s dashboard data. That’s a 32% decline from July’s $599 million and marking the lowest trading volume since June 2021.
The X2Y2 platform led the decline, falling 40% month-on-month. Thus, with trading volumes for Blur, OpenSea and LooksRare down 38%, 18% and 8% respectively. Additionally, the Bitwise Blue-Chip NFT Collections Index, which includes some of the biggest NFT collections such as CryptoPunks and Bored Ape Yacht Club, is down 37% year-to-date.
Furthermore, , another popular blockchain for minting and trading NFTs, did not perform much better either. Daily trading volumes on Solana-based NFT marketplaces have dropped below $1 million for the first time since September 2021.
Regulation knocks on the door
In the regulatory environment, the SEC is processing an NFT project. In this sense, this is the first time that an authority has taken enforcement action against a company for this type of digital negotiation.
The company in question is Impact Theory, a media company based in Los Angeles. The SEC alleges that Impact Theory encouraged potential investors to buy NFTs from its project called “Founder’s Key”. The sheriff of the US capital market claims that the digital assets offered were in the form of “investment contracts”. For the SEC, this is equivalent to the sale of “bonds” or securities.
As of 2021, Impact Theory has reportedly raised an estimated $30 million from hundreds of investors around the world, most of them in the United States.
As a result of the SEC action, the company agreed to pay a $6.1 million fine, destroy all NFTs still under its control, and eliminate any royalties it may have received from sales of the tokens in secondary markets.
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