Bitcoin Ordinals nonfungible token (NFT) user activity has experienced an alarming decline, with trading volumes plummeting by approximately 98% since May, according to data from DappRadar. The total sales volume for Bitcoin Ordinals, which reached its peak at $452 million in May, has now dropped to around $3 million as of August 14. The number of transactions has also declined by about 97% to 20,571 within the same period.
DappRadar’s report highlighted the concerning situation in the Ordinals market but pointed out that more time is needed to determine whether this decline is a temporary setback or a systemic problem for Bitcoin-based NFTs. The report stated, “This steep decline in both sales volume and count within such a short period is alarming for Bitcoin Ordinals. The diminishing sales count underscores the waning enthusiasm or perhaps confidence in Bitcoin NFTs.” It also raised concerns about the longevity and relevance of Bitcoin Ordinals in the NFT space due to the consistent decline in transaction count.
The decline in Bitcoin Ordinals activity follows a hype-driven second quarter, during which trading volumes and user activity significantly increased compared to the first quarter of 2023. DappRadar suggested that a key issue affecting the sustainability of Ordinals is the divided outlook within the Bitcoin community regarding the inclusion of NFTs on the network. Unlike Ethereum and other blockchains, which do not face this issue, some members of the Bitcoin community primarily view Bitcoin as “digital gold,” while others see Ethereum as “digital oil,” fueling the digital economy.
The report emphasized the importance of the coming months in determining whether Bitcoin can establish itself in the ever-evolving NFT landscape or revert to its primary role as a store of value. Currently, according to CryptoSlam data, the Bitcoin network ranks seventh in terms of NFT sales volume over the past 30 days, generating $14.6 million from 21,989 buyers.
The decline in Bitcoin Ordinals activity raises questions about the future of Bitcoin-based NFTs. The Bitcoin community’s divided outlook on NFTs’ presence on the network poses a challenge for the sustainability and growth of Bitcoin Ordinals. However, it is yet to be seen whether Bitcoin can find its place in the evolving NFT landscape or if it will primarily remain a store of value.
As the NFT market continues to evolve and adapt, it is crucial to monitor the trends and developments surrounding Bitcoin Ordinals. The future of Bitcoin NFTs depends on various factors, including market dynamics, community sentiment, and the ability to address the concerns raised by the declining transaction count.