October has a well-established reputation in the crypto world as an "up only" month, primarily due to Bitcoin's consistently strong performance. However, for non-fungible tokens (NFTs), history suggests a different narrative, with October often marked by declining sales and values. In this article, we delve into the past two years to understand the phenomenon of "Floptober" in the NFT market.

NFT Performance in October 2021:

In September 2021, NFT sales amounted to a robust US$4.2 billion. However, as October rolled around, the NFT market experienced an 8.7% drop in sales, settling at US$3.8 billion. Moreover, the average sales prices of NFTs fell by a substantial 28%, from US$557.12 to US$400.22.

NFT Performance in October 2022:

The following year, in 2022, a similar trend emerged. NFT sales in September 2022 amounted to US$643 million, but by October, they had decreased by 12.5% to US$562 million. Surprisingly, average sales prices increased by 10.4%, from US$76.63 to US$84.66.

Macro Perspective on NFT Market Losses:

Analyzing the macro level, the Forkast 500 NFT Index revealed a consistent pattern of value loss in both September and October 2022, with the NFT market losing just over 7% of its value each month.

Catalysts for Market Reversal:

It's essential to note that in previous years, October often marked the culmination of a six-month downward trend in the NFT market. In both 2021 and 2022, the market required a catalyst to reverse this trend. In 2021, an end-of-year $SOS airdrop injected much-needed liquidity and halted three consecutive months of declines.

The Impact of FTX's Collapse:

In November 2022, FTX's collapse brought lower crypto prices but also offered a momentary resurgence for NFT collectors. While the value of NFTs plummeted by 24.57%, total sales increased by 9.25% to reach US$614 million.

NFTs vs. Crypto Markets:

NFTs often exhibit an independent or even inverse relationship with the broader crypto markets. When crypto prices are low, NFTs tend to be more affordable, whereas rising crypto prices lead to more expensive NFTs. With NFTs still perceived as overvalued, the strong performance of cryptocurrencies in "Uptober" could spell trouble for NFTs this month. Unless fresh liquidity or another catalyst enters the market, the two-year trend of "Floptober" in NFTs may continue.

Recent Market Observations:

Recent data shows that the NFT market is experiencing its lowest weekly sales, with US$58 million in cross-chain sales recorded, marking a low point not seen since 2021. However, the growth in the number of buyers, sellers, and transactions suggests a resilient NFT economy that is outpacing early 2021 trends.

September 2023 Sales Comparison:

September 2023 has witnessed a significant downturn, with total NFT sales of US$294 million, the lowest since January 2021.

Notable Highlights:

- DMarket's gaming skin dominance continues, partly driven by the launch of CounterStrike 2.

- Big sales and interest in the BAYC collection led to a 61.97% sales increase.

- Pudgy Penguins' expansion into 2,000 Walmart stores made headlines.

- Ethereum remains a dominant force in the NFT market.

- Mythos Chain's popularity grows, driven by CounterStrike gaming skins.

- DraftKings accounts for a significant portion of Polygon's NFT sales.

- Solana stands out with multiple NFT collections contributing to its weekly sales volume.

In conclusion, while October traditionally favors cryptocurrencies, the same cannot be said for NFTs, which have historically faced challenges during this month. The crypto community will be closely watching whether NFTs can break the trend of "Floptober" and find a catalyst for a turnaround in the coming weeks.