NFTs Soared in 2021. Now They’re Sinking

The NFT market seems to be affected by the bearish sentiment prevailing within the broader crypto and conventional markets. Buying and selling volumes on the most important NFT market OpenSea are trending down, whereas ground costs of many so-called blue-chip NFTs maintain falling. 

Blue Chip NFTs Endure in Market Drawdown

After a mainstream explosion all through early 2021 and the start of this 12 months, the NFT market is bleeding within the newest crypto downtrend. The ground costs of many high-value NFTs have dipped since hitting all-time highs across the finish of January.

Regardless of a robust begin in the beginning of the 12 months, the ground costs for a lot of the prime blue chip NFT initiatives fell all through the whole lot of February. Bored Ape Yacht Membership, arguably essentially the most sought-after NFT challenge of all, is among the many hardest hit, tanking roughly 40% in Ethereum-denominated phrases for the reason that starting of February.

In dollar-denominated phrases, the current value motion for Bored Ape Yacht Membership NFTs is even worse. On the all-time excessive costs reached on the finish of January, the most affordable JPEG from the cartoon monkey assortment would’ve set patrons again 118 Ethereum value round $436,000 on the time. The ground value for the gathering immediately is round 72 Ethereum, or $182,000. That’s a 58% decline in greenback phrases. 

CryptoPunks, the second most useful NFT challenge by market capitalization, hasn’t fared any higher. The Larva Labs assortment hit an all-time excessive ground value of round 123 Ethereum in October and is presently buying and selling at round 66.5 Ethereum. As Ethereum can be down since October, CryptoPunks have misplaced round 60% of their greenback worth. 

Different in-demand, albeit newer and less-established initiatives like Doodles, Azuki, and Invisible Buddies additionally skilled value drops during the last 30 days. Doodles is right down to 10.35 Ethereum after hitting a excessive of 16.25 Ethereum, whereas Azuki and Invisible Buddies have each additionally tumbled. 

The plunge in ground costs for blue-chip NFTs additionally coincides with an identical discount in buying and selling volumes. Per Dune Analytics knowledge, the most important NFT market, OpenSea, hit a peak of $4.95 billion in quantity in January, however exercise slowed in February with the overall quantity hitting $3.5 billion. 

Taking a look at every day volumes, the chart reveals a constant downtrend. Yesterday, for instance, OpenSea noticed its slowest day of buying and selling exercise during the last 100 days, with quantity at round $48 million. For comparability, on Jan. 31, the perfect day for {the marketplace} over the identical interval, OpenSea noticed virtually $360 million in buying and selling quantity for the day.

The second-largest NFT market and direct OpenSea competitor, LooksRare, additionally noticed its buying and selling quantity sink within the second half of February, regardless of orchestrating an aggressive liquidity mining occasion to draw as many NFT merchants to its platform as attainable. The platform’s buying and selling exercise has subsided from staying constantly above $400 million in every day quantity within the first half of January to a median every day quantity of round $70 million during the last ten days.

Disclosure: On the time of writing, the creator of this piece owned ETH and several other different cryptocurrencies.