Alongside the declining trading volumes, the number of Bitcoin Ordinals transactions dropped by 97% to just 20,571 in mid-August.
DappRadar has pointed to an “alarming plunge” in Bitcoin Ordinals nonfungible token user activity, with trading volumes tanking around a whopping 98% since May.
In an Aug. 17 report, DappRadar highlighted its data showing that the total Bitcoin Ordinals sales volume had decreased from peak levels of $452 million in May to roughly $3 million as of Aug. 14.
In line with that drop, the number of transactions also declined by around 97% to 20,571 within that same time-frame.
DappRadar described it as a grim scenario for the Ordinals market, but did also emphasize that more time is required to determine whether this is a “temporary setback” or something that represents a “systemic problem of Bitcoin-based NFTs.”
“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,” the report noted, adding that:
“While fluctuations in sales volume could be attributed to market dynamics, a consistent decline in transaction count may point toward broader issues. It suggests that fewer traders are engaging with Bitcoin Ordinals, which could raise concerns about its longevity and relevance in the NFT space.”
Q2 saw a significant decline in the #NFT market, both in terms of trading volume and active wallets.
One of the biggest victims was #Bitcoin Ordinals, with sales down 97% since May.
Is this the end of Bitcoin NFTs?
DappRadar exploreshttps://t.co/v0ouv9uwVJ
— DappRadar (@DappRadar) August 17, 2023
The decline comes after a hype-filled second quarter for Bitcoin Ordinals, which saw trading volumes and user activity skyrocket compared to Q1.
DappRadar went on to suggest that a key issue around the sustainability of Ordinals is that the Bitcoin community has a divided outlook on whether NFTs should be on the network or not — something which isn’t an issue for Ethereum and other blockchains.
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“There are voices within the community that view Bitcoin primarily as ‘digital gold,’ suggesting that its primary function should remain as a store of value. On the other hand, Ethereum is often referred to as ‘digital oil’, indicating its role in fueling the digital economy,” the report reads, adding:
“The coming months will be crucial in determining whether Bitcoin finds a foothold in the ever-evolving NFT landscape or reverts to its primary role as a store of value.”
According to CryptoSlam data, the Bitcoin network is currently ranked seventh in terms of NFT sales volume over the past 30 days with $14.6 million generated from 21,989 buyers.
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