Due to the current status of the cryptocurrency market, sales of blue-chip NFT collections such as the Bored-Ape Yacht Club have decreased.
The NFT market is about to go through the same rough patch as cryptocurrencies, resulting in a global market downturn.
NFT’s Plummeting Sales
BAYC’s aggregate sales price has decreased 29 percent in US dollars in the last week, according to NFT monitors Price Floor and DappRadar. Transactions, on the other hand, have decreased by 21%, while user numbers have decreased by 27%.
Recently, the popular NFT collection outpaced the rest of the crypto market. The price level peaked at the end of April, according to NFT Price Floor statistics. Since its high in early November, bitcoin has lost more than half of its value.
The current decrease of BAYC looks to be part of a broader non-fungible token market trend. In the recent week, the JPG NFT Index, which covers a wide spectrum of NFTs, fell by nearly 26%. Bucella stated that these marketplaces are often illiquid. They also stated that if the market is selling off in droves, they will sell all they own.
In the past six months, he added, significant portfolios of NFTs have been formed. Borrowers can get money by pledging their digital artwork as collateral for NFT-backed loans. It could be contributing to the decline in NFT sales.
Bucella hypothesized that the transactions could simply be collateral to pay debt obligations. He also mentioned the prospect of a loan unwind if investors have suffered significant losses on their investments.
According to CoinMarketCap, bitcoin has lost 17% in the last week, while ether has lost 15%. The ongoing sell-off in tech equities on traditional markets, as well as issues with TerraUSD, have lowered token valuations. It’s an algorithmic stablecoin that’s backed by the US dollar.
Will It Bounce Back?
After reaching historic highs last year, the crypto market has crashed. The concern on everyone’s mind right now is whether the market will rebound. There are many various perspectives and answers to those problems, so do what’s best for you and your situation.
Cryptocurrencies are currently losing value, and so are stocks with better prospects. Investors, on the other hand, frequently regard falling equities and rising prospects as opportunities.
According to Josh Lim, they are seeing a slow-motion implosion. Long holdings have been trading more than levered liquidations, in part. Given that several corporate banks are approaching their cost basis, markets are waiting to see if investors would push for some de-risking, according to an analyst.
The billionaire cryptocurrency investor and CEO of Galaxy Digital Holdings Ltd., Michael Novogratz, cautioned that things will deteriorate before they improve. Investors are abandoning risky assets as central banks tighten policy to combat soaring inflation and diminishing liquidity.