When the crypto market was generally sluggish during the first quarter, some investors turned to non-fungible tokens, or NFTs, which outperformed most other digital assets at the time, in search of a safe haven. However, the bets quickly turned sour.
Prices for major NFT collections have crashed, with the most popular losing more than 50% in the past month amid broad sell-offs in risky assets, as investors fret over runaway inflation, signs of a slowing economy and the tightening of monetary policy by the Federal Reserve.
Bored Ape Yacht Club, one of the most popular NFT collections, saw its floor price, or the lowest price among its items, dip to 88 ETH on Friday, or around $153,000, from 138 ETH on April 27, that’s over $390,000 based on Ether. price at that time, according to data from CoinGecko.
It’s down more than 60% to $237,000 in the past month.
The crisis could be partly attributed to the ether ETHUSD,
reservoir, as the majority of NFTs are based on Ethereum, while the network’s native coin has lost 38% in the past month.
fell 25% over the same period, according to data from CoinDesk.
NFT trading has also slowed down. OpenSea, the largest NFT marketplace, has seen its trading volume drop by more than 45% to around $2.53 billion in the past 30 days and the number of traders drop by 13% to 416,419, according to the data. by Dapp Radar.
“As risk sentiment takes root in markets, assets furthest from the risk spectrum are being crushed,” IntoTheBlock analysts wrote in notes Friday.
Still, analysts believe there have been continued innovations in the NFT space, despite the prevalence of speculation. “This isn’t the first time NFTs have appeared ‘dead’ and it likely won’t be the last,” the analysts wrote.
GameStop Corp. EMG,
said on Monday that it launched a digital wallet for cryptocurrencies and NFTs. Meanwhile, e-commerce company eBay Inc. EBAY,
is launching its first collection of NFTs, which features animations of athletes featured on the covers of Sports Illustrated, the company announced earlier this week.
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