The collapse of the NFT market

The NFT market is collapsing.

Sales of irreplaceable tokens or NFTs fell to an average of about 19,000 this week, down 92% from a peak of about 225,000 in September.

The number of active portfolios in the NFT market fell 88% to about 14,000 last week from a high of 119,000 in November. NFTs are bitcoin-like digital tokens that act as a certificate of ownership that exist in a blockchain.

Rising interest rates have shattered risky bets on financial markets – and NFTs are among the most speculative.

After peaking in November, the tech Nasdaq Composite fell 23% and bitcoin fell 43%. The Federal Reserve is expected to raise interest rates this week and next. As the central bank’s easy money policies fell away, investors turned to more protective stocks as major consumer goods.

Many NFT owners find that their investments cost significantly less than when they bought them.

NFT on the first tweet from the co-founder of Twitter Inc. Jack Dorsey was sold in March 2021 for $ 2.9 million to Sina Estavi, CEO of Malaysia-based blockchain company Bridge Oracle.
Earlier this year, Mr Estavi announced an NFT auction. He did not receive offers over $ 14,000, of course, he did not accept.

Mr Estavi said the failure of the auction was not a sign that the market was deteriorating, but was just a normal fluctuation that could happen in any market. The NFT market is still evolving and it is impossible to predict what it will look like in a few years.

Another NFT buyer bought NFT from Snoop Dog, titled “Doggy # 4292,” in early April for about $ 32,000 on the air. NFT, an image of a green-skinned astronaut standing on what looks like a star on the Hollywood Walk of Fame, is now up for auction with a asking price of $ 25.5 million. The highest current bid is for 0.0743 ether – about $ 210.

This lack of interest is not unique. Interest in NFT, as measured by the number of searches for the term, peaked in January, according to Google Trends, and has fallen by about 80 percent since then.

The imbalance between supply and demand also harms the NFT market. There are about five NFTs for each buyer, according to research firm Chainalysis. By the end of April, 9.2 million NFT had been sold, bought by 1.8 million people, the company said.

The largest cryptocurrency exchange in the United States still relies on NFT. Coinbase launched a beta site last month and four million people signed up. This will allow users to link existing portfolios to the site and buy and sell NFT, initially without trading fees, and create NFT through the site.

NFT’s profile grew in 2021 when musicians, artists, celebrities and companies joined. Artist Beeple sold NFT, related to his work of art, for $ 69 million. Adidas AG and Nike Inc. created and sold NFT tied to their sneakers. McDonald’s Corp. sold NFT related to the re-launch of the McRib sandwich.
There are indications that collectors can also distinguish between NFT, which catalogs a huge array of cartoon-like characters – such as CryptoPunks – and personalized, NFT art projects stimulated by great artists who already enjoy museum followers.

Among those artists who double the art of NFT is New York artist Jeff Koons. The artist, known for his huge sculptures of balloon animals, is selling a series of NFTs attached to a real sculpture he intends to launch to the moon later this year. His Pace Gallery said his moon-shaped sculptures attached to his NFT are selling fast as a $ 2 million package.

Earlier this month, the NFT art platform TRLab said it took just a minute for Chinese artist Cai Guo Qiang, who is internationally known for making gunpowder works, to sell out his 7,000 NFT series, which allows buyers to help create their own digital fireworks. .

Zack Friedman, co-founder and chief operating officer of crypto-brokerage Secure Digital Markets, says what sets NFT apart now is some privilege or utility associated with it.

Director Kevin Smith plans to sell 5555 NFT related to the upcoming film “Kilroy Was Here”. Only people who own NFT will have access to the film.

A band called The Crystal Method is selling an NFT auction-bound new song that includes backstage tickets for a concert and dinner with the band.

“Those who continue will certainly be focused on usefulness,” said Mr. Friedman.

 Dealer Anatoliy Pavlov

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