The value of “blue chip” NFT initiatives is decreasing as certain trading metrics across NFT marketplaces have fallen to near two-year lows.
This week, floor prices for “blue chip” NFT collections CryptoPunks and Bored Ape Yacht Club (BAYC) plunged well below $100,000 worth of ETH for the first time in months, while the broader NFT market slumped to trading volumes not seen in years.
According to NFT Price Floor, it presently costs 49.8 ETH ($93,692 at the time of writing) to acquire a CryptoPunk, despite the NFTs’ recent recovery. A month ago, the cheapest CryptoPunk on the market could be purchased for slightly more than $128,000 worth of ETH. This price has decreased by more than 30 percent.
It’s the same with Bored Apes, the star project of NFT giant Yuga Labs that is popular with celebrities. At the moment, it costs at least 49 ETH, or about $92,200, to add an ape to the collection. Buying a Bored Ape hasn’t cost that little ETH since November 2021.
Those falling numbers seem to be a sign of a bigger problem: less and less trades are happening on the NFT market as a whole. Dune Analytics says that since mid-April, the number of daily trades on all NFT markets has dropped by a shocking 71%.
This drop in activity has happened slowly and in the same way on all platforms. On Thursday, there were just shy of 20,000 NFT deals, which is the lowest number since late 2021.
It’s still not clear what caused the latest drop. The rise in Ethereum’s price after Shanghai has slowed this week, but the biggest NFT market’s cryptocurrency, which is worth about $1,845 as of this writing, still looks pretty strong.
The rise of Blur, a relatively new NFT trading platform that quickly overtook OpenSea as the top NFT marketplace in late February, has been a big reason why there have been so many good news stories about the NFT market recently.
However, Blur’s rise was fueled by a rewards system that incentivized traders to forsake other marketplaces and flip as many NFTs as possible, even between themselves.
Despite the fact that the NFT market grew to approximately $2 billion in total trading volume each month in February and March, this growth was almost exclusively fueled by volume from Blur, which some industry experts have labeled “wash trading.”
Over 60% of all NFT trading volume in the last week was done on Blur. This shows that activity on Blur still rules the market. But it’s possible that Blur’s plan to get customers from other platforms and get them to make useless trades for finances has started to slow down real NFT market activity.
Some have suggested that recent spikes in gas fees, presumably caused by the rise of meme coins such as PEPE, could explain the phenomenon. In a Thursday Twitter thread, the analytics firm SeaLaunch cited a variety of macro factors that may have played a role, including elevated gas fees and liquidity issues among traders around the U.S. tax deadline.
Others have cited the gloomy numbers as evidence that the long-awaited “bottom” of the crypto and NFT bear market has finally been reached. However, as the past year has demonstrated, there is sometimes further to fall.
Content Source: decrypt.com