Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

NEWS

Cryptoverse: NFT bubble gets that shrinking feeling

Published On :

By Elizabeth Howcroft

(Reuters) – The NFT bubble isn’t popping, but it may have sprung a leak.

A year on from when a single non-fungible token sold for $69.3 million in crypto at Christie’s auction house, with the buyer paying to be recorded on blockchain as the owner of a digital file that anyone can see online for free, this weird and wild market is showing some signs of slowing down.

Sales on OpenSea, the largest NFT marketplace, had reached nearly $5 billion in January, a giant leap from the $8 million a year before, but declined to around $2.5 billion last month.

Around 635,000 people bought an NFT last month, for $427 on average, according to market tracker CryptoSlam, down from about 948,000 for $659 in January.

Companies nonethless continue to pile into the fashionable “metaverse”, where digital assets like virtual land and clothing for avatars can be bought for cryptocurrency as NFTs. JPMorgan and HSBC are among businesses that have opened virtual venues in NFT-based worlds this year, while YouTube and Instagram also have NFT plans.

Obviously the enthusiasm and interest that we had at some periods last year is not here anymore,” said Pablo Rodriguez-Fraile, a Miami-based digital art collector. “I think we achieved something that wasn’t sustainable.”

He added that sales had picked up again in recent weeks, though.

Graphic: NFT sales on OpenSea- https://fingfx.thomsonreuters.com/gfx/mkt/zjvqkdodgvx/Past%20the%20peak.png

Modesta Masoit, director of finance and analytics at NFT research firm DappRadar, said the market was not in overall decline but rather consolidating after its meteoric growth, adding that investor caution following Russia’s invasion of Ukraine in late February may have depressed sales.

Everybody was expecting that there was going to be a consolidation period,” she added. “It’s not going away, it’s just consolidating.”

Overall NFT sales have totalled about $11.8 billion so far in 2022, according to DappRadar, excluding $19.3 billion worth of sales from a platform suspected to be dominated by irregular trades, where a small number of accounts trade items back and forth for inflated prices.

Graphic: Daily NFT volumes- https://fingfx.thomsonreuters.com/gfx/mkt/xmvjoqeqwpr/Daily%20volumes%20drop.png

BULL TO BEAR TO APE

NFTs can be exotic and dangerous beasts.

Prices can drop dramatically after an initial surge, in a highly volatile market where the value of an asset depends on its social status.

Nima Sagharchi, head of digital assets at auction house Bonhams, said that in contrast to the traditional art world, the NFT market can see-saw between bull and bear cycles within as little as a week.

An NFT representing a piece of computer-generated abstract images from a collection called Art Blocks would sell for around $15,000 on average at a peak in September 2021, but fetched just under $4,200 last month, according to CryptoSlam.

Meanwhile, Bored Ape Yacht Club NFTs – a set of 10,000 variations on a cartoon primate – still sell for around $300,000 on average.

Graphic: Bored Ape prices- https://fingfx.thomsonreuters.com/gfx/mkt/myvmnqxqlpr/Six%20figure%20profile%20pictures.png

Buying a Bored Ape – as celebrities including Madonna and Paris Hilton have done – can be considered akin to joining a cross between a members’ club and an investment scheme. Buyers often advertise their membership by setting their NFT as their profile picture on social media.

A cryptocurrency called ApeCoin was launched last month, given initially to holders of Bored Ape NFTs as well as the project’s founders. Its market cap is already $3.4 billion, according to Coinbase data.

Raoul Pal, a former Goldman Sachs executive, wrote in a blog post that expectations for this token encouraged him to spend around $400,000 worth of the cryptocurrency ether on a Bored Ape NFT.

“Social tokens are the BIG thing,” he wrote.

Graphic: NFT indexes- https://fingfx.thomsonreuters.com/gfx/mkt/gkplgqaoevb/NFT%20indexes.png

 

(Reporting by Elizabeth Howcroft in London; Editing by Pravin Char)

Continue Reading

Why pay for news and opinions when you can get them for free?

       Subscribe for free now!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Posts