The monthly trading volume for tokens based on the Bitcoin Ordinals protocol has nosedived by over 97% since May 2023.

Ordinals offer the unique proposition of generating fungible (BRC-20s) and non-fungible tokens (NFTs) on the Bitcoin blockchain. These assets surged in popularity throughout the second quarter of this year. Trading volume peaked in May at $452 million but has rapidly fallen since then, according to a DappRadar report.

June saw Ordinals trading volume plunge 76.5% to $106 million, the report said. July and August saw a complete reversal of May’s trading fervor. Trading volume in July receded month on month by 66.9% to $35 million. Current data, from midway through August, shows a volume of only $3 million. This represents a fall of more than 97% since May’s all-time high.

Trading volume is an indicator of market strength. This decrease in volume could be interpreted as a signal of declining market interest in Ordinals.

"The decline raises pivotal questions about the future of NFTs on the Bitcoin blockchain," the report stated.

Declining UAW participation

According to the DappRadar report, at the height of market interest in May, there were 79,261 unique active wallets (UAW) participating in the Ordinals market. This has fallen to only 6,708 in August.

DappRadar describes its UAW data as a metric measuring the number of unique wallet addresses interacting with Ordinals.

The Ordinals protocol first rose to prominence earlier this year, enabling the creation of tokens and NFTs on Bitcoin and causing a surge in transactions and fees on the network.