NFT Prices Tumble As Crypto Investors Place Big Bets On Bitcoin And Ethereum ETFs
12 Juin 2024 - 5:00AM
NEWSBTC
In a market dominated by optimism surrounding the price spikes of
Bitcoin (BTC) and Ethereum (ETH), the non-fungible token (NFT)
market has seen a decline in popularity. NFTs, which include
digital artwork and collectibles recorded on blockchains, have
recently experienced a notable loss of appeal. According to a
Bloomberg report, Google searches for NFTs have reached their
lowest levels since 2021, when these tokens first gained mainstream
attention. Popular NFT Collections Experience Steep Price Declines
A significant drop in sales further highlights the NFT market’s
struggles. Researcher DappRadar reveals that NFT sales have
decreased by more than six percent to $8.5 billion in the first
five months of this year compared to the same period in the
previous year. This decline starkly contrasts the industry’s
peak in January 2022, when it recorded an impressive $17.2 billion
in NFT sales within a single month. Related Reading: Blood In The
Water? Ethereum Whales Circle As Price Drops The report further
notes that the sentiment surrounding NFTs hit last month when the
US Securities and Exchange Commission (SEC) initiated steps toward
approving exchange-traded funds (ETFs) directly investing in
Ethereum. In anticipation of this approval, some investors
reportedly began reallocating their investments into ETH while
divesting from NFTs. Nicolas Lallement, co-founder of NFT
data tracker NFT Price Floor, explains that capital rotation is
common in crypto markets, with Ethereum likely to continue
attracting and absorbing market capital, resulting in price drops
for other assets like NFTs. This year, many popular NFT collections
have experienced significant price declines. NFT Price Floor
reports that prices for these collections are down by 40 percent to
50 percent year-to-date. CryptoPunks, a collection minted on
the Ethereum network, is trading around 2021 levels and has dropped
by 29% from its lowest point in the previous year. Similarly,
collections such as Bored Ape Yacht Club (BAYC) and Chromie
Squiggle have seen their price floors, based on Ethereum, decrease
to approximately half of what they were at the lowest point of last
year. Market Correction Looms Daniel Maegaard, an NFT collector,
confirms that most NFT collections continue to decline or remain
stagnant after the peak euphoria observed in 2021. Maegaard has
recently sold several blue-chip NFTs, including works by digital
artists XCOPY, Hackatao, and Coldie. While some NFT art
collections, such as XCOPY’s, have posted positive returns over the
past 90 days, Lallement says the overall trend points to a market
correction. Related Reading: Bitcoin Price Crashes Below $67,000:
Key Reasons Amidst the challenges faced by the NFT market, one
platform that has shown resilience is the NFT marketplace, Magic
Eden. The platform has been gaining market share as trading
activity on its platform has increased, as per Sara Gherghelas, an
analyst at DappRadar. Although Magic Eden recorded record volume in
April, trading activity has since decreased. In sum, the current
state of the non-fungible token market reflects a decline in
popularity and prices. While some individual collections have shown
positive returns, overall market sentiment suggests a continuation
of the NFT market correction. At the time of writing, ETH was
trading at $3,480, following Bitcoin’s lead, with a sharp 5% drop
in the past 24 hours and over 8% in the past seven days. Featured
image from DALL-E, chart from TradingView.com
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