The NFT market is cooling down.
According to The Block Research data, between May and June, the monthly transaction volume of NFTs fell from $4 billion to $1.04 billion, a drop of 74%.
The 74% drop was by far the largest month-on-month drop in NFT market trading volume. The second-largest month-on-month decline occurred in the February-March period of this year, with a drop of 48%.
OpenSea dominated the market in June with a total transaction volume of $696 million, accounting for 67% of the month’s total volume. Despite accounting for the bulk of NFT trading volume during the NFT market downturn, OpenSea announced on July 14 that it would lay off 20% of its workforce.
Magic Eden, an NFT marketplace for Solana-based NFTs, has slowly competed with OpenSea for market share despite declining transaction volumes — even after OpenSea activated support for Solana in April of this year. Magic Eden accounted for 0.1% of trading volume in early 2022 and now accounts for more than 10% of that volume, according to The Block.
The NFT market has experienced the first bear market test, and mergers and acquisitions have become its main theme.
Since 2013, there have been 53 M&A transactions between NFTs and GameFi, including 20 in the first two quarters of 2022 (8 in Q1 and 12 in Q2), accounting for 38% . Despite the recent cooling in the NFT market, the number of M&A transactions in the NFT space in the second quarter of 2022 hit a record high of 12.
Among them, there are three mergers and acquisitions that deserve attention and are likely to cause changes in the market structure.
On April 25th, OpenSea announced the acquisition of NFT market aggregator Gem, saying the move was “investing in the future of professional communities” and improving user experience. Following the acquisition, Gem will continue to operate independently of OpenSea as an independent product and brand. Obviously, this is a “defensive” merger from the monopoly side.
On June 22, Uniswap Labs acquired the NFT aggregation platform Genie, which was seen as a signal that it entered the NFT trading market. According to official information, starting this fall, users will be able to buy and sell NFTs on the Uniswap app, and the top decentralized exchange for crypto assets will also evolve into a comprehensive platform. As a DEX leader, Uniswap’s acquisition of Genie can be described as the first case of vertical integration between the ERC721-based NFT market and the ERC20 token market, which will change the pattern of the entire NFT market to a certain extent.
On the same day in June, e-commerce giant eBay announced the acquisition of KnownOrigin, a UK-based NFT marketplace, which it said would further boost its business in the digital collectible space. It can be expected that eBay will guide more brands to sell various types of digital artworks in the future, and more brands outside the circle, traffic, and funds will quickly pour into this industry.
It is foreseeable that as the market continues to slump, the valuation of projects in the primary and secondary markets of the crypto industry will shrink significantly compared with the previous ones. This will be a favorable opportunity for giants with abundant funds to carry out mergers and acquisitions. In the future, we may see more and more similar action.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/nft-bear-market-test-when-mergers-and-acquisitions-consolidate/
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