NFT mania continues to grow, with new drops popping up everyday and Ethereum’s gas prices consistently back above triple digits. The recent wave into NFTs was further amplified by Visa’s acquisition of a CryptoPunk and Budweiser’s buy of the beer.eth domain.
Prices of notable NFT collections such as CryptoPunks and Bored Ape Yacht club had already been climbing throughout the past month and accelerated this week amidst the institutional interest coming into the space. This has led to impressive growth in volumes trading at OpenSea and increased demand for the Ethereum blockchain.
The average price for a CryptoPunk recently reached 67 ETH, representing a 730% increase year-to-date. The even simpler Art Blocks Squiggles have done even better, with their average price up an astonishing 48,000% this year.
The success of NFT collections like these has led to a flood of new projects launching their NFTs seemingly everyday now. From apes to penguins to koalas, and with several copycats of CryptoPunks, the supply of NFTs appears to be increasing to fill the large surge in demand.
Aside from creators, the largest beneficiaries of the recent NFT rally have been marketplaces, particularly OpenSea.
Sales on OpenSea have increased over 2000x year over year, from under a million in August 2020 to more than $2 billion so far in August 2021. These figures are only for the Ethereum mainnet, and OpenSea launched in Polygon last month, meaning that total volume is likely to be even higher.
The rise in volume in OpenSea comes as the number of monthly collectors surpassed 100,000 for the first time in its history.
The number of monthly active addresses buying at least one NFT on OpenSea has increased approximately 80x year over year. While there is certainly a high number of new entrants into the space, the data shows that collectors are also spending more with an average transaction volume of nearly $12,500 per address.
For better or worse, the recent NFT frenzy has had a strong impact on Ethereum fees. Throughout the course of this week in particular, gas prices have quickly climbed from under 40 gwei to over 100 gwei.
By analyzing this data intra-day, it appears that gas prices tend to climb in the afternoon in UTC times. Therefore, it may be better for NFT buyers to look into making acquisitions during late night or early morning UTC times in order to avoid overpaying for gas.
Overall, demand for NFTs has continued to be a driving force for Ethereum usage over the past few months. While this has resulted in pricing out some users, at least now Ether holders get to benefit from this activity as over 14,000 ETH (~14% of the total) has been burned in OpenSea alone since the implementation of EIP-1559.
On the other hand, even though it may be more expensive to buy NFTs, the recent wave of interest has also led to an expansion in the variety of projects available to choose from. Ultimately, this points to both holders and users benefiting from the recent NFT craze.