According to recent data from DappRadar, Bitcoin Ordinals nonfungible token user activity saw an “alarming plunge” reaching around a 98% decrease since May. A shocking contraction from peak levels of $452 million to a mere $3 million as of August 14. Amid this slump, the transaction numbers experienced a drastic fall by 97% to just 20,571.
The outlook for the Ordinals market seems somber, yet it is still too soon to categorically classify this state of affairs as a “temporary setback” or indicative of a “systemic problem” for Bitcoin-based NFTs. The considerable drop in both sales volume and transaction count within such a modest timeframe undoubtedly raises concerns about the longevity and relevance of Bitcoin Ordinals in the bustling NFT market.
However, perspective also plays a significant role. The second quarter saw a hype-induced boom for Bitcoin Ordinals, which set the bar high with rocketing trading volumes and user engagement compared to Q1. Here, the key concern about the sustainability of Ordinals crops up- the Bitcoin community itself is torn on whether NFTs should feature on the network.
A faction views Bitcoin mostly as a “digital gold,” meaning that its key function should continue being a store of value while on the other side, Ethereum is commonly referred to as “digital oil” for fueling the digital economy. Accordingly, the upcoming months will be a trial to see if Bitcoin manages to solidify its place in the dynamic NFT landscape or recedes to its primary function as a value holder.
The NFT sales volume ranks the Bitcoin network seventh in the last 30 days with an impressive $14.6 million generated from nearly 22,000 buyers. Meanwhile, the churning tides of creator royalties have Marie Kondo-ed the NFT community into two: those that favor zero-trading fee platforms with optional creator royalty protocols and advocates for fixed royalty payments. It is still unclear how this divide will impact the future landscape of the NFT market.