NFT trading volume dropped dramatically in February after a record breaking start to the year.
Analysts say there was a large decrease in the value of sales on blockchain platforms last month.
Data from DappRader indicates approximately $10.6billion worth of sales were conducted in February, a 30 percent drop off compared to the month before.
In January non-fungible tokens – one of a kind digital assets – saw nearly $15billion worth of total trading volume.
OpenSea, which is the leading marketplace for the tokens, saw sales of about $3billion last month, a drop from the $5billion in January.
LooksRare, a competitor to OpenSea, also saw a drop off in sales in February.
Total NFT trading volume dropped by almost a third from $9.5billion to $6.5billion last month.
LooksRare only launched on January 10 and trading surged almost immediately afterwards.
However, the $9.5billion monthly total was largely down to users manipulating the market and deliberately repeatedly selling NFTs to between accounts they controlled to artificially increase the price.
Its decrease in February despite manipulation on the platform, further points to a cooling in market interest.
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Despite the drop off in sales, February was still the second biggest month for total trading volume.
While January was a record month, February’s figures were still considerably larger than trading in November and December last year.
As well as a drop in total value, selling prices for NFTs are also in decline compared with January.
The average price for a non-fungible token dropped below $2,000 in February, down from an all-time high of almost $6,900 on January 2.
The exact reason for the declines remains unclear, however, some analysts believe the outbreak of war between Russia and Ukraine has played a role.
Data from Google points to a large drop off in search for NFTs since the conflict broke out on February 24.
Prices of average sales have dropped about 30 percent since the invasion began.
It is thought the conflict may have shifted focus towards cryptocurrencies as the digital payments are used to help fundraising efforts for Ukraine, and by Russians seeking to avoid being hit by international sanctions.
READ: How Ukraine and Russia are using cryptocurrency at war
While the drop off in average NFT selling price is steep, the market continues to see strong year-on-year growth, up from just $128 at the start of 2021.
And while the decline in prices will send alarm bells ringing for some inverters in the blockchain space, there is other evidence that NFTs are still growing in popularity.
Although the value was total sales was down, DappRadar registered an eight percent rise in total NFT traders.
There was also a two percent uptick in the total number of the assets sold across platforms.
“Trading volumes are down in general, but the demand measured by the number of unique traders and sales count is increasing,” said Pedro Herrera, senior data analyst at DappRadar.
“So while we’re seeing less volume, there’s more activity.”
He added: “This, to me, says the space is slowly but surely diversifying and maturing.”
