Solana’s NFT sales dive as Bitcoin Ordinals surge

Solana’s secondary non-fungible token (NFT) sales dropped nearly 50% in May, to US$44.9 million from US$85.7 million in April. The Forkast SOL NFT Composite, a measure of NFT activities in the Solana blockchain, also decreased by 12.13% throughout May.

The dip in Solana’s NFT market coincides with a surge in Ordinals, a type of NFTs on the Bitcoin network. Bitcoin’s monthly NFT sales volume skyrocketed by 474% in May, reaching over US$189 million, according to CryptoSlam data. This boost positioned Bitcoin as the second most popular NFT chain, a title often held by Solana.

“The single reason for the major change in the Solana ecosystem is simply the impact of Bitcoin NFTs,” said Yehudah Petscher, NFT strategist at Forkast Labs. “Since Bitcoin NFTs launched at the end of January you can see Solana’s numbers steadily decreasing. Sellers, buyers, total transactions, are all 50% or less than they were prior to Bitcoin NFTs.”

Bitcoin’s monthly NFT sales multiplied by more than six-fold, growing from US$32 million in April to US$195.7 million in May. The Bitcoin blockchain recorded its 10 millionth Ordinals inscription on Monday, Dune Analytics data showed.

“People who use Solana are likely already Bitcoin users, but it doesn’t work the other way around. I would assume that many who use Bitcoin don’t touch other chains other than Ethereum. The point here is that the Bitcoin blockchain appeals to every single crypto and NFT trader, and the same can’t be said for Solana,” said Petscher.

The recent surge in memecoins has also factored into Solana’s falling NFT sales, according to Brian Boisjoli, product manager at Forkast Labs.

“The majority of people were trading memecoins instead of NFTs,” said Boisjoli, who has also traded memecoins over NFTs in the recent fad. “It suggests people are going to chase the hot item and leave the last shiny [NFT] in the dust.

Interest in memecoins surged in April, led by tokens like Pepe and Floki that were listed on major crypto exchanges like Binance. Pepe rose nearly 7,000% in two weeks after it launched on April 17 and is up over 2,100% since its launch, according to CoinMarketCap.

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The number of unique NFT buyers on Solana dropped to 56,729 in May from 83,241 in April, according to CryptoSlam.

“When memecoin season settles, I’m sure the capital will come back to NFTs,” Boisjoli added.

Will Bitcoin reach Ethereum’s NFT sales volume?

Bitcoin’s May NFT sales of US$195.7 stood at nearly half of Ethereum’s monthly total of US$356 million, which is the largest blockchain by NFT sales volume. Monthly NFT sales volume decreased by 21.98% on Ethereum, and the Forkast ETH NFT Composite fell 4.35%. Meanwhile, Bitcoin’s monthly sales volume increased by 377.25% in the same period, according to CryptoSlam.

“People should really pay attention to how significant, and how disruptive Bitcoin NFTs are. Especially if you are of the mind that Bitcoin NFTs volume could eclipse Ethereum’s in the future. At that point, will there be any demand for blockchains other than Bitcoin, Ethereum, and Ethereum’s layer 2s,” said Petscher.

He added that Bitcoin will continue to capture market share from alternative chains to reshape the NFT landscape.

The new BRC-721E token standard launched on Monday enables Ethereum-native NFTs to be transferred to Bitcoin. The new standard permanently burns the ERC-721 NFT on Ethereum, allowing users to claim the recreated version of the NFT on Bitcoin as a BRC-721E inscription.

See related article: Bitcoin and Ethereum: Two titans battle for NFT supremacy