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Arbitrum Beats Ethereum and Solana With 119% Surge In NFT Sales, NFT Resurgence On The Horizon?

Arbitrum (ARB), the Ethereum Layer 2 scaling solution, has been facing a bearish week after failing to establish a new price floor and falling below the $2 level. Additionally, the unlocking event scheduled for March could negatively impact the token’s price.

Despite ARB’s recent drop, the blockchain has seen a greater performance in the non-fungible token (NFT) market, surpassing Ethereum and Solana.

Arbitrum: Top Gainer In The Last Day

Data from Crypto Slam shows that the daily NFT sales volume in the Arbitrum blockchain recovered in the last 24 hours. The blockchain is the fourth largest by total NFT volume sales, showing a recent performance larger than Ethereum or Solana.

The chart above shows that Arbitrum is the top gainer after seeing a 119.41% surge in sales volume, over $1.26 million, during the last 24 hours. The blockchain also registered an 8.09% increase in wash sales from the day prior. Despite the rise, it only accounts for 0.11%, or $1,489, of the total sales volume.

Wash trading is a practice used to inflate an asset’s value artificially. As a form of market manipulation, the trader buys and sells the same asset, usually through a third party, to create the impression of a higher market activity of said asset.

Wash sales in the NFT market can happen through a single seller creating multiple accounts to trade the NFT or two sellers scheming to buy and sell each other’s digital assets.

The Arbitrum blockchain had 8,094 transactions during the last day, which accounts for a 9.04% increase. Its demand and offer of NFTs also rose by approximately 10%, with 3,557 buyers and 1,904 sellers in the previous 24 hours.

Solana and Ethereum saw a milder increase in their daily volume sales, with 26.69% and 5.42% respectively. Solana had a total sales volume of $10.9 million, divided by $9.17 million in authentic sales and $1.77 million in wash sales, which is 16.21% of the total volume and a 9.37% surge from the day prior.

Despite the sales volume being worth almost eleven million dollars, the demand and offer saw a significant 21.21% transaction drop and a 15.6% buyer decrease on the last day.

On the other hand, the NFT sales in the Ethereum blockchain saw a 2.9% drop in its total daily sales volume. Similarly, the number of transactions faced a slight 3.79% decline, with 23,931 transactions.

However, it’s worth noting that wash sales in the Ethereum blockchain saw a significant 19.33% decrease, with $7.14 million in the last 24 hours.

Is An NFT Resurgence In The Horizon?

The daily sales volume suggests a recent interest in some of the NFTs offered in the Arbitrum and other top blockchains. However, said interest could be a momentary thing in this ever-changing market. To paint a bigger picture, let’s look at what the 7-day time frame data suggests.

As seen in the chart below, five of the top ten blockchains by NFT sales volume have increased in this timeframe. Arbitrum, Bitcoin, and BNB Chain are among the top gainers in the last week.

Arbitrum remains the biggest winner with its massive 373.18% surge. The number of buyers and sellers also increased exponentially, with a 69% surge (approximately 35,000 buyers) and a 56% increase (27,000 sellers) in the past week.

Ethereum takes the first spot as the blockchain with the largest NFT sales volume of $202.5 million. However, Solana remains the winner in the transaction and the user’s metric. The blockchain saw 860,714 transactions in the past week, with over 242,041 buyers and 144,395 sellers.

Besides the sales volume, the transactions and buyer/seller numbers shone some light on the NFT market in the past week. These numbers, green in the top ten blockchains by NFT sales, undoubtedly suggest an increase in interest in the 7-day time frame. However, these numbers are significantly below the NFTs market performance shown in the 30-day metric.

ARB, ARBUSDT, Arbitrum

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SEC Charges Stoner Cats With Alleged Unregistered $8 Million Securities Sale In NFT Crackdown

In a recent move that intensifies the Securities and Exchange Commission’s (SEC) crackdown on the Non-Fungible Token (NFT) sector, the SEC has charged Stoner Cats 2 (SC2) with conducting an “unregistered offering of crypto asset securities.” 

The charges specifically target Stoner Cats’ sale of non-fungible tokens, which raised approximately $8 million from investors to finance the production of an animated web series.

SEC’s Legal Earthquake Hits NFT Market Once Again 

The SEC order reveals that on July 27, 2021, SC2 sold over 10,000 NFTs to investors at approximately $800 each, with the entire supply being sold out within a mere 35 minutes. The SEC alleges that SC2’s marketing campaign highlighted the potential benefits of owning the NFTs, including allowing owners to resell them on the secondary market. 

Furthermore, the SEC claims that SC2 emphasized its Hollywood producer expertise, knowledge of crypto projects, and involvement of well-known actors in the web series, which led investors to anticipate profits from the potential rise in resale value.

According to the SEC, SC2 configured the NFTs to provide a 2.5% royalty for each secondary market transaction, incentivizing individuals to buy and sell the NFTs. Subsequently, purchasers allegedly engaged in over 10,000 transactions, amounting to more than $20 million. 

The SEC alleges that SC2 violated the Securities Act of 1933 by offering and selling these SEC-denominated “crypto asset securities” to the public without registering the offering or qualifying for an exemption.

Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, emphasizes that the determination of whether an investment contract qualifies as security lies in the economic reality of the offering, rather than the labels attached to it. Grewal stated: 

Here, the SEC’s order finds that Stoner Cats marketed its knowledge of crypto projects, touted that the price of their NFTs could increase, and took other steps that led investors to believe they would profit from selling the NFTs in the secondary market.

Stoner Cats Settles Charges, Agrees To NFTs Destruction

While the SEC’s actions are intended to “protect investors” by ensuring proper disclosures, some critics argue that the SEC’s language and terminology surrounding the NFT market are biased and lack clarity. 

Crypto enthusiast and investor Adam Cochran expressed his concerns, highlighting that there is no such thing as an “unregistered offering of NFTs” since registration requirements typically apply to securities. Cochran believes that the SEC’s communications should accurately reflect the law to avoid a chilling effect through fear-mongering.

In response to the charges, SC2 has agreed to a cease-and-desist order and to pay a civil penalty of $1 million. The order also establishes a Fair Fund to return funds to injured investors who purchased the NFTs. 

Additionally, SC2 has committed to destroying all NFTs under its possession or control and publishing notice of the order on its website and social media channels.

The SEC’s lawsuit against Stoner Cats underscores the ongoing regulatory battle surrounding the NFT sector. As the industry evolves, stakeholders are calling for clearer guidelines and unbiased regulatory practices to strike a balance between investor protection and fostering innovation in the digital asset space.

NFT

Featured image from iStock, chart from TradingView.com 

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NFT Floor Prices Plunging Amid Ongoing Crypto Market Pandemonium

The crypto markets has plunged by 14% over the past 24 hours, including the double whammy of Ethereum’s loss of 18% and Bitcon’s dip by 16% while NFT sales are also suffering from the crypto market crash but primarily because of ETH prices plummeting.

On a lighter note, NFT trading volume has incremented over the 24 hours by 54%, which is an excellent opportunity for collectors to hoard prized NFT collections.

The prices of high-end and popular nonfungible token collections like Bored Ape Yacht Club have also plunged; its lowest NFT floor price dropped by as much as 16%, or $107,000. The Bored Ape floor price plummeted by 11%, or roughly 74.5 ETH.

Nevertheless, the project has depreciated since May. On April 29, you can buy the cheapest Bored Ape NFT at 152 ETH or a whopping $429,000. You’ll see the enormous difference in the numbers.

Crypto Winter: Total Market Cap Drops By $1 Trillion

The total market cap of all cryptocurrencies has dropped to as much as $969 billion on Monday. And NFT collections are following suit.

More popular blue-chip nonfungible token collections are crashing like Doodles dropping by 21% or a current floor price of 8.1 ETH or equivalent to $11,650, Mutant Ape Yacht Club decreased by 22% or 14 ETH which is around $20,100, Meebits that toggled down by 27% or a floor price of 2.8 ETH which is about $4.050, and Moonbirds that spiraled down by 16% which is about 16.2 ETH or $23,250.

BTC total market cap at $429 billion on the daily chart | Source: TradingView.com

Suggested Reading | Dogecoin Shed 91% Of Its Value Since 2021 High – A Musk Tweet To Pump DOGE?

NFT Floor Price Drowns; Trading Volume Escalates

While the NFT floor price is in the hock, trading volume is increasing. Many collectors are taking advantage of falling ETH prices to grab blue-chip NFT collections at lower price tags.

Total nonfungible token sales are now at $39 million, which may seem lower than the sales in early May, but it’s a significant improvement compared to the previous days. NFT market has risen remarkably by 54% in terms of trading volume over the past 24 hours.

Trading volume in 2021 was at $25 billion, making this year’s stats a massive improvement. And the numbers can still increase in the following days. OpenSea NFT sales spiked to as much as $476 million. The nonfungible token market appears to be more robust now than ever despite the crypto struggles and uncertainty.

Suggested Reading | Ether Drops Below $1,400, Pummeled By US Inflation And Difficulty Bomb Setback

Featured image from Blockworks, chart from TradingView.com