Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.
According to data, almost all the largest NFT collections in the market are down by a considerable margin.
The crypto market has seen a massive pullback recently with Bitcoin down by more than 50% from its all-time high. This has had a ripple effect on the rest of the cryptos breaking their major support to record new lows. Interestingly, the Non-Fungible Token (NFT) market was better off until now. Its floor price was at its all-time high by the end of April. According to data, almost all the largest NFT collections in the market are down by a considerable margin. Nansen Metrics discloses that the market caps of the likes of Bored Ape Yacht Club, CloneX, Crypto Punk, etc dropped by 10% to 20% in the last three days.
The average sale price of BAYC in the last seven days fell by around 29%. Its number of users has also decreased by 27%, causing its transactions to be reduced by 21%. The pullback did not spare JPG NFT Index as it has seen a 26% decline this week. JPG NFT Index is known for providing exposure to a broad basket of NFTs. According to the NFT price floor, the sale price of Otherdeeds NFT collection fell by 23% in the last seven days with Moonbirds falling by 19% within the same period.
According to Michael Bucella, a partner at BlockTower Capital Advisors, there has been a substantial portfolio built in the last months. However, the market is generally illiquid.
“They are just fairly illiquid markets generally. If the market is selling off en masse, they are going to sell whatever they have,” said Bucella.
Bucella has further linked the decline in NFT sales to the NFT-backed loans that allow borrowers to use their artworks as collateral.
“This could be just collateral selldowns to satisfy loan obligations. If you had folks taking some pretty significant hits on their assets, there’s a potential loan unwind,” Bucella explained.
While the market is already struggling, Zagabond, the founder of Azuki, one of the top NFT collections in the market, has made things worse with a recent comment. In the post, he mentioned how he participated in previous projects but was unsuccessful. Cryptophunks, Tendies, and Cryptozunks were all abandoned. Unfortunately, his comment has created negative reactions in the NFT community as he has been accused of impersonating a female curator and engaging in rug pulling.
According to data by Nansen, Azuki’s price dropped from 19 to 9.49 ETH. However, some NFT players have decided not to make their investment decision based on the past of the founder. It is expected that the NFT market bounces back to reclaim its lost value.