Bear Market or Burst Bubble?
Non-fungible tokens (NFTs) feel bad right now. Volume is down, and prices are tumbling, including pillars of the markets, Bored Ape Yacht Club and CryptoPunks.
Other than Blur bidding farmers who is actually buying NFTs? Volume down immensely, unique wallets down, innovation down, floor prices down, anxiety up.
There is no real volume supporting these levels, only bid farming and wash trading. For months now.
Someone prove me wrong.
— Anorak.eth (@Anorak_NFT) April 21, 2023
The year started like a rocket, giving those planning for a trip to the moon some hope that the latter half of last year was an anomaly instead of what it truly was; the start of many projects heading to zero.
Gone are the days of NFTs minting and instantly commanding a multiple ETH floor. That wasn’t a sign that we were early on investments that led to generational wealth. No, that was a bubble, and that bubble has burst.
What do you think the floor will at two weeks – post reveal?
Asset: @KarafuruNft
Current Floor (Feb 4th): 4.3 ETH
Pre-Sale Mint Price (Feb 4th): 0.2 ETH
👀
🎲#Karafuru #KarafuruNFT #ETH #opensea #LooksRare #Ethereum #ETH #NFTCommunity #NFT #Crypto #Whitelist— capi | og.kongz.eth (@capitatestalk) February 5, 2022
If you’ve been watching the Forkast 500 NFT Index, the continued downtrend isn’t a surprise. Let’s take a look at the past 24 hours in the NFT market and zoom out from there to see just how significantly the market has deflated.
In the past 24 hours, the NFT market is down around 0.75%. Not so bad, right?
Now let’s look at the past seven days. We’re down over 7%.
At 30 days we’re even lower, down over 8%.
Any guesses about 60 days? It’s hard to look at, but here you have it. We’re down over 17%.
YTD, we’re down 9%, but if we look at the peak of 2023 on January 18th through today, we can see that the NFT market is down a staggering 26%. This year’s gains have been completely erased.
Zooming out to when the masses first came into NFTs and inflated the bubble is pretty enlightening. Since the Forkast 500 Index began tracking the market on Jan. 1, 2022, the Forkast 500 is down over 88%. That means if you had invested $1,000 into the top 500 NFT projects across blockchains, you’d now have about $220 worth of NFTs today. I’m guessing this is what your NFT wallet feels like right now.
It’s possible that the NFT market has found its bottom, but keep in mind that thousands of projects minted out and made enough funds to keep their project running for some time. They may be able to keep afloat longer, but without innovation to bring in new collectors. With projects’ income from royalties evaporating, it’s looking like the runway they built for themselves is running out of road.
An entire culture has been born around collecting NFTs, and that’s never going away. But given how much activity there had been in the NFT space earlier this year and the fact that we’re just now beginning to enter another slowdown, this feels like NFTs still have a long way to fall. The question is, “how low can we go?”.
In the next week, we’ll shine a light on just how big of a problem wash trades have become and how the space has largely been propped up by them. The data may shock you.
