Apr 5 (Reuters) – The NFT bubble is not bursting but a leak may have emerged.
A year later, when a single non-fungible token was sold at Christie’s auction house for $69.3 million in crypto, with the buyer paying to be registered on the blockchain as the owner of a digital file that anyone can view online for free, so weird and wild The market is showing some signs of slowing down.
Revenue on OpenSea, the largest NFT marketplace, had hit nearly $5 billion in January, a huge jump from $8 million last year, but fell to about $2.5 billion last month.
About 635,000 people bought an NFT last month for an average of $427, according to market tracker CryptoSlam, up from about 948,000 for $659 in January.
Businesses nonetheless continue to push into the fashionable “metaverse” where digital assets such as virtual land and clothing for avatars can be purchased as NFTs for cryptocurrency. JPMorgan (JPM.N) and HSBC (HSBA.L) are among companies to open virtual venues in NFT-based worlds this year, while YouTube and Instagram (GOOGL.O) also have NFT plans. Continue reading
“Obviously the enthusiasm and interest that we had at times last year isn’t there anymore,” said Pablo Rodriguez-Fraile, a Miami-based digital art collector. “I think we achieved something that wasn’t sustainable.”
However, he added that sales have picked up again in recent weeks.
NFT sales on OpenSea
Modesta Masoit, director of finance and analytics at NFT research firm DappRadar, said the market is not down overall but is consolidating after its meteoric growth, adding that investor caution after Russia’s invasion of Ukraine in late February has weighed on sales could have pressed.
“Everyone expected there would be a period of consolidation,” she added. “It’s not going away, it’s just consolidating.”
According to DappRadar, NFT’s total sales so far in 2022 are around $11.8 billion, excluding $19.3 billion worth of sales from a platform believed to be dominated by irregular business, on the one small number of accounts swapping items back and forth at inflated prices. Continue reading
Daily NFT Volume
Bull to Bear to Monkey
NFTs can be exotic and dangerous beasts.
In a highly volatile market, where the value of an asset depends on its social status, prices can fall dramatically after an initial surge.
Nima Sagharchi, head of digital assets at auction house Bonhams, said that unlike the traditional art world, the NFT market can switch back and forth between bull and bear cycles in as little as a week.
An NFT, representing a piece of computer-generated abstract imagery from a collection called Art Blocks, would sell for an average of around $15,000 at its September 2021 peak, but fetched just under $4,200 in the last month, according to CryptoSlam.
Meanwhile, Bored Ape Yacht Club NFTs — a set of 10,000 variations on a cartoon primate — still sell for an average of $300,000.
Prices for bored monkeys
Buying a bored monkey — as celebrities like Madonna and Paris Hilton have done — can be viewed as joining a hybrid membership club and investment program. Buyers often promote their membership by posting their NFT as their social media profile picture.
Last month, a cryptocurrency called ApeCoin was launched, initially given to holders of Bored Ape NFTs as well as the founders of the project. According to Coinbase data, the market cap is already $3.4 billion.
Raoul Pal, a former Goldman Sachs executive, wrote in a blog post that the expectations of this token encouraged him to spend around $400,000 worth of cryptocurrency ether on a Bored Ape NFT.
“Social tokens are the BIG thing,” he wrote.
Reporting by Elizabeth Howcroft in London; Editing by Pravin Char
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