The phenomenal rise of Non-Fungible Token (NFT) trading volume on OpenSea could be one culprit contributing to the tanking price of Ether (ETH). Data from Etherscan shows that in the past few weeks, OpenSea has been unloading thousands of ETH on the market. Similarly, NFT creators on the platform have been taking out profit according to the data. OpenSea’s NFT trading volume continues to rise this January.
OpenSea’s success could be partly responsible for the Ether crash
OpenSea, the biggest NFT marketplace, has been recording unprecedented NFT sales since 2022 began. The monthly NFT sales on OpenSea is currently over $4.5 billion according to data from Dune Analytics. This figure breaks their previous highest monthly sales record of $3.5 billion and is poised to go higher.
This success may be having consequences on the price of Ether, the native token of the Ethereum blockchain network that holds the biggest share of the NFT market. Data from Etherscan shows that in the last two weeks, OpenSea and NFT issuers using OpenSea have transferred around 56,300 into the crypto market. In this period, OpenSea has transferred 21,000 ETH from its wallet to Coinbase. NFT issuers also transferred 35,300 ETH through OpenSea’s royalties distributors. At the current price of ETH, the transfers are worth over $134 million.
However, OpenSea is not the only factor responsible for the drop in the price of ETH. Ether is down over 35% year to date per data from Coinmarketcap. In the last 14 days, over $746 has been wiped off the value of ETH as it has slipped under $3,000. ETH is currently trading at $2,407, down -3.71% in the last 24 hours.
What else has contributed to Ether’s crash?
Several factors have been contributing to the crypto market crash including a broad market selloff on the back of a change of policy by the US Federal Reserve Bank. Not left out of the contributing factors is the changing policy direction of Russia towards crypto.
However, market participants remain long-term bullish for Ether. Several upgrades that the network plans to launch this year are fueling these hopes. For one, the next phase of Ethereum’s journey to being a proof-of-stake (PoS) blockchain is in the pipeline for this year. Several projections are claiming that the merge is set to occur in H1 of 2022. This upgrade will usher in more scalability for the Ethereum network and contribute significantly to making Ether issuance deflationary. The resultant effect is that it will increase adoption and drive up the price of Ether in the long term.
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