Are NFTs Collapsing? Yes, But So Is Everything Else

NFTs are fighting.

On Sunday, NFT sales were lowest on OpenSea, the largest market for such products, since December. According to Dune Analytics, only $ 52 million worth of merchandise has been sold. Compare with April, when the volume fell below $ 100 million on just a handful of opportunities.

Reluctant buyers have led to a sharp drop in NFT prices. Boring Ape Yacht Club NFT By the end of April, the starting price was about $ 400,000 (145 ethers), but by Monday the price had been cut in half to $ 200,000 (91 ethers).There are other similar declines Blue chip collection.. Pixelized Moonbird entry prices dropped from about $ 110,000 to $ 44,000 on Monday, and Reese Witherspoon-backed World of Women entry prices dropped from $ 34,000 to $ 10,000 in mid-April.

Exacerbating the chaos, NFTs are dumping immediately with Bitcoin and Ether. Bitcoin is below $ 30,000 for the first time since 2020, and ether is $ 2,300, well below November’s high of $ 4,600. Web3 It’s not working.

The Wall Street Journal reported last week that NFT sales were “flat” due to a significant drop in the number of NFTs purchased. .. This caused another type of euphoria: the Panther calls for the imminent end of the NFT.

“The NFT market is collapsing.” One tweet with over 1000 likes.. “Digital Rock and Digital Monkey weren’t good stores worth it.”

There is something in these declarations. NFT is a technology four years ago, and people have been paying attention only to it for the past year or so. Almost completely supported by crypto investors, their long-term durability is worth questioning. Ethan McMahon, economist at blockchain data analytics firm Chainalysis, said:

However, there is an element of confirmation bias here. People cite a decrease in the number of NFTs purchased as evidence of collapse and are unaware that money is moving to a small set of expensive NFTs rather than being distributed to thousands of cheap NFTs. .. $ 400,000 Ape instead of 100 different NFTs of $ 4,000 each.

The selective examples of NFTs that were purchased for huge sums a few months ago and are now sold in some of them are just as useless. NFT is unstable. That is, money moves quickly from one trend to another. Indeed, Jack Dorsey’s first tweet sold for $ 2.9 million a year ago, Received a maximum bid of only $ 280 at an auction in mid-April.. Does that mean the NFT time is over? Probably not because the same week, traders spent $ 76 million to buy pixelated owls at Moonbird’s public sale.

People hate NFTs. Because most of them are bad for the earth, and now they mainly exist as follows. Rich status symbols for celebrities and cryptocurrencies.. But just because you hate them doesn’t mean they’re leaving.

That does not mean that the NFT market is healthy at this time. NFTs are fighting. But so is everything else.

The bad market is the Federal Reserve 0.5% rate hike, The largest in 20 years. If the NFT market rose, it was virtually the only thing. The Nasdaq stock index fell 20% last month. Compared to this day last month, Alphabet and Amazon are down 11% and 28%, respectively. It’s not just tech companies, as most consumer companies are feeling oppressive. Disney has fallen 18% in the last 30 days. WWE has released record quarterly profits, but it is still in the red month-on-month. Nike and Adidas are down 11%, and Gucci owner Kering is down 15%.

Bored Ape Yacht Club has partnered with Neflix with the aforementioned 50% price cut.Worse by Losing a subscriber for the first timeThe stock price of the streaming giant has halved in the last 30 days.

What goes up must go down. According to DappRadar, the NFT market grew about 2,500% in 2021 and spent $ 25 billion compared to about $ 94 million in 2020. ..

But the same is true for many companies whose reputation has skyrocketed since March 2020. Amazon’s share price in July last year reached $ 3,777, double the pre-COVID price. Apple, Netflix and Meta have all doubled in stock over the last two years, with Tesla’s highests 14 times higher than its pandemic lows.

The numbers go up. The numbers go down.

NFT is not dead-yet

The fate of NFTs is, in many respects, encapsulated as follows: other side, The next metaverse developed by Yuga Labs, creator of Bored Ape Yacht Club. On April 30, Yuga Labs deleted the Otherside NFT Land Certificate. A little less than $ 1 billion has been spent on virtual land in the next 10 days.. It’s hard to say that an NFT died when the biggest trading day in history occurred within the last two weeks.

However, the launch has highlighted some of the weaknesses of cryptography-weaknesses that are contributing to the downturn in the market. Thanks to Ethereum’s efficiency issues, traders have spent about $ 200 million in transaction fees, including thousands of dollars on failed transactions. Ether’s deflation protocol burns these “gas” charges. This means that about four days of current market activity have been destroyed.

Still, the future Metaverse is, in many respects, the evolution of NFTs. NFT Mainly used as a digital status symbolHowever, Yuga Labs wants to transform the Bored Ape brand into a mainstream AAA game. That’s not all, as dozens of NFT creators want to sail from OpenSea to your living room. The success of a few people speaks more about the long-term viability of NFTs than the slump caused by the surge in interest rates that affected most other indexes.

Don’t count digital monkeys yet.