Sales of non-fungible tokens are increasing, with a wave of optimism bringing another crypto bull market to the fore: the day after Bitcoin price hit $41,000, digital collectibles Azuki 7994 and Azuki 4138 sold at extravagant prices, 72 ETH and 40 ETH, respectively.
The momentum, which has already led to Ethereum-based NFT sales almost doubling from $306 million in October to $605 million in November, has one key player at its epicentre.
Blur, the pro-trader platform that in February 2023 became the number one place to trade digital collectibles only five months after its launch, currently holds almost 80% of the market share by trading volume.
Former industry leader Opensea remains the most visited market by NFT enthusiasts, yet its share of the total revenues generated dropped to only 17% of the total.
While the leading market player may differ from the one reigning during the 2021 NFT mania, the same can't be said about users' number one motivation for buying and selling digital collectibles - speculation.
The fear of missing out on the next bull market highs is leading users to wager their money on art again. Blur, with its unique trading features - lower fees, high purchasing flexibility, and unique incentives - encourages speculation.
According to Sam Gellman, the platform's bid farming system, which allows users to accumulate bid points and farm blur tokens, has a "massive impact" on market activity. In an interview, the research director at NFT community PROOF warned that numbers are not everything, as farming "leads to a lot of momentum-chasing and unfortunately some pump & dump strategies, which can increase volatility in both directions."
Blur's 'mercenary participants' are not the only ones driving the current sales volume of NFTs. Veteran crypto market traders for whom digital collectibles are an integral part of the ecosystem, standing as a token of innovation and wealth, are also spending more. According to the editor of Nifty Noon, with the value of digital assets increasing, "crypto-rich people begin to realize some of their gains, they feel a desire to spend their wealth (as a reward and as a flex) on the NFTs that resonate most with them."
Old-guard market players are the driving force behind the price jump in Web3-native collections, such as Pudgy Penguins, which achieved a record-high floor price of 9.3 ETH last week. Meanwhile, the recent boom in Solana has increased liquidity to the benefit of the blockchain's digital collectibles projects, with volume reaching a level that hasn't been seen since April.
The renewed interest in the ecosystem is now more than simply market speculation, showing that the post-crash moves towards increased sustainability in the NFT market have largely worked - if not to trump the profit motive for art's sake, at least to make the value of digital art not just a byproduct of market speculation.