Magic Eden’s Token Rallies As Trading Volume Rebounds to Highest Since August

Solana-based NFT marketplace Magic Eden's native token (ME) rallied as trading activity climbed to the highest since August.

ME surpassed $4 on Dec. 27 to reach a market capitalization of $527 million, climbing 2.6% in the past 24 hours and 28% over the past week, to the highest since Dec. 14, according to CoinGecko. This performance contrasted with the broader cryptocurrency market, which is down 1.8% over the last 24 hours and down 3.2% over the past week at the time of publishing.

In December, the platform recorded $124 million in trading volume across all chains, so far, a 65% increase compared to the $75 million recorded in November, and the highest since August, according to data compiled by Dune Analytics. Volume is down 67% in the past seven days, from the previous week, according to Dune.

Alice Shikova, marketing lead at digital identity platform SPACE ID, told The Defiant that ME’s surge can be attributed to several factors, including its listing on Binance earlier in December and a substantial airdrop distribution.

“But this doesn't mean the NFT market is about to experience another 2021 - it's just a sign that speculators are looking for easy money in recognizable names,” Shikova said.

“We will likely continue to see such pumps for individual projects in the future, but it will take more than one or two to convince us that the NFT market is truly coming back to life," she added.

Decline from Top

But even after the jump in Magic Eden trading volume in December, activity this month represents an 85% decrease from its peak trading volume of $834 million in March, the highest for the year.

Trading volume dropped across all chains, but the decline was particularly pronounced on Solana and Bitcoin, which includes activity from Runes and Ordinals. Bitcoin accounted for only $33 million in trading volume in December, a 93% decrease compared to the $479 million recorded in March. Solana's trading volume dropped by 88%, falling from $227 million in March to $28 million in December.

In December, the platform has recorded approximately 284,000 NFT sales so far, a 7% decrease from November’s 304,000 sales. December’s sales also represent an 85% drop from the 1.9 million sales achieved in May, the highest recorded for the year.

ME Token Airdrop

The ME token launched to great excitement on Dec.10, fueled by a high-profile airdrop that captivated the crypto community and drove its price to an all-time high of $13.24. However, this initial surge was followed by a sharp correction, bringing the price down to an average of $2.50.

“Looking at the bigger picture in the NFT market, there was a lot of hype around the ME TGE and the $PENGU token, with hopes they'd take the NFT market to the next level,” Rabin Nuchtabek, VP Growth at Hype, told The Defiant. “But, as we've seen time and again, airdrops can lead to sell-off pressures. Many were expecting something akin to the $HYPE Hyperliquid surge, but that didn't pan out.”

The rebound to $4 should bring traders some solace, but the 250% climb to reach a new high of around $14 will likely depend on whether interest in NFTs comes back.