Nfts
NFTs Fail to Regain Appeal as Investors Turn to New Ether ETFs
(Bloomberg) — Many investors are betting that Bitcoin and Ether will hit new highs this year, but there’s one corner of the cryptocurrency market that’s getting a cold reception: non-fungible tokens.
Tokens, better known as NFTs, which can be digital artworks of monkeys or other collectibles recorded on blockchains, are losing even more of their appeal. This month, searches for NFTs on Google hit their lowest level since 2021, when the tokens began going mainstream, according to Google Trends.
In the first five months of the year, NFT sales declined more than 6% to $8.5 billion compared to the same period last year, according to researcher DappRadar. In contrast, the industry sold $17.2 billion worth of NFTs in one month in January 2022 – its peak.
Sentiment deteriorated last month after the U.S. Securities and Exchange Commission took the first step toward approving exchange-traded funds investing directly in Ether. Ahead of an approval, some investors started turning to Ether and abandoning NFTs, said Nicolas Lallement, co-founder of NFT data tracker Price Floor.
“Cryptocurrency markets are all about capital turnover,” Lallement said. “It is foreseeable that Ethereum will continue to attract and absorb capital from the market and cause the prices of other assets to decline.”
Since the start of the year, prices for many popular NFT collections have fallen by 40-50%, according to NFT Price Floor. The floor price of CryptoPunks, which are issued on the Ethereum network and bought and sold with Ether, is around 2021 levels and is down 29% from its lowest point last year , when the market was so bad that everyone thought crypto-winter was the lowest. hit. Popular collections like Snowfro’s Bored Ape Yacht Club and Chromie Squiggle have rock-bottom prices, based on Ether, that are about half of what they were at last year’s lowest point, NFT Price said Floor.
“We are still seeing a majority of NFT collections continue to sell or remain stable after the peak of 2021 euphoria,” Daniel Maegaard, a well-known NFT collector, said in an email.
Maegaard said it has sold a number of its high-profile NFTs recently, including works by digital artists XCOPY, Hackatao and Coldie. Some NFT art collections from artists like XCOPY have seen positive returns over the past 90 days, according to Lallement.
Also booming is the NFT market Magic Eden, which has gained market share as token trading on its platform has resumed, according to Sara Gherghelas, an analyst at DappRadar. In April, it saw record volume, although it has since declined, according to DappRadar.
©2024 Bloomberg LP