OpenSea Trading Volume Hits Yearly Highs Following Major Marketplace Update

Key Takeaways

• OpenSea daily volume surged above $30 million this week.
• The increase in volume coincided with two announcements.
• OpenSea is still the biggest marketplace, according to most metrics.

The Non-Fungible Token (NFT) market has fallen precipitously since its peak in 2020-2021.

The largest marketplace, OpenSea has also suffered, exacerbated by the fact that there are now several competitor marketplaces.

A brief resurgence in volume on Feb. 13 has sparked optimism that the market will enjoy a similar uptrend.

Let’s analyze the reasons behind this increase and determine if it is sustainable.

Opensea Volume Surges

The Opensea volume has surged since Feb. 13, reaching new yearly highs. There are two potential catalysts for this increase.

The Opensea 2 Beta version first went live, offering a new user interface and 14 new chains, with native cross-chain purchasing.

The second is the announcement of Opensea’s native token , SEA, which was made on the same day.

The foundation did not provide an exact date for the token’s launch. It is worth mentioning that the OpenSea CEO has denied this announcement, stating that no native token is in the works.

Trading volume reached a high of $32 million on Feb. 17, an increase of over five-fold since the $4.2 million seven days prior, on Feb. 10. Additionally, the volume has been even lower in 2024, usually trading at around $1 million.

A similar increase was seen in Feb. 15-17, when trading volume reached $27 million.

This happened because of users who tried to qualify for the PENGU airdrop by purchasing Pudgy Penguins or Lil Pudgys.

The attempts were unsuccessful since the NFT’s floor price fell almost equally to its airdrop value, offsetting any possible arbitrage opportunities.

Since a change in user interface and various cross chains trading is less likely to cause a five-fold increase in trading activity, the most plausible scenario is that the increased usage is a result of users trying to qualify for the upcoming airdrop, even though the foundation has confirmed that historical and not just recent usage will be an important metric to determine the allocation.

NFT Marketplace Overview

Despite the rise of several other NFT marketplaces, OpenSea still leads in most metrics. Firstly, the user market share shows that Opensea has 52% of the market, while Magic Eden is in second place at 37%.

While this is a far cry from the nearly 70% dominance it enjoyed in 2023, it still puts it in the driver’s seat.

However, it is worth mentioning that the proportions were much closer to even in January, so the sudden increase in OpenSea users can also be attributed to the SEA announcement.

A category where OpenSea has always had a sizeable lead is the Unique Collections Market Share, which has always had over 40% of the share.

Tensor suffered the largest drop-off from the largest marketplaces. It decreased from 33% at its peak to a low of 6.5%.

The NFT sector has also suffered considerably as illustrated by the steep decline in sales compared to its peak.

The number of weekly sales in USDT is at 73 million. This is a massive decline from the peak of $2 billion in sales in August 2021. The sales chart has trended downward since.

While there was a brief resurgence at the end of 2023, that could not be sustained, and sales declined.

With the crypto market cycle possibly nearing its end, the NFT market had a brief resurgence but will not go into a full bull run similar to 2021-2022 unless a major catalyst happens.

SEA Token Behind Increase

The likely reason for the OpenSea volume increase is the announcement of the native token SEA, which has not yet been confirmed as true.

Users likely flocked to the exchange to create activity that would make them eligible to receive the token.

Therefore, the increase in volume is not sustainable, a trend echoed throughout the rest of the NFT markets.