The crash in the crypto market has caused a significant drop in the price of the entire crypto market. There is about a 15% drop in the price tag. Meanwhile, this ripples in the whole crypto space, including non-fungible token marketplaces. That’s because the significant crypto used in the NFT space, Ethereum (ETH), is crashing with the market at around a 20% drop.
How NFTs Respond to the Crypto Market Crash
The crypto market is all-encompassing. Decentralized finance (DeFi), non-fungible tokens (NFTs), derivatives and other crypto products are a part of the crypto ecosystem. And it is natural to see ripples of what happens in the entire crypto market to play out in the NFT space. As such, NFTs are to crypto as the nucleus is a part of a cell.
When you think of popular NFTs, you would want to recall CryptoPunks, Bored Ape Yacht Club, Doodles and Moonbirds. These NFTs have sold over the roof. They remain the mainstream NFTs used to adopt people into the NFT ecosystem.
While the entire crypto market is crashing, the Bored Ape Yacht Club hit its floor price. As a result, it drops to close to $107,000, a 16% reduction. Likewise, it is listed at a cheap price on the secondary marketplaces. But this price drop doesn’t render the NFT useless. It performs better than Ethereum (ETH).
Despite this NFT doing well when measured against ETH, it experienced a value depreciation in just two months. As of April, NFT Price Floor reported that you could get a Bored Ape NFT for about $430,000. And that’s close to 152ETH. Meanwhile, some top collections are riding a downward spiral. Mutant Ape Yacht Club cut down by 22%, Moonbirds around 16% and Doodles by 21%.
The Twist: NFT Sales and Trade Volume Increases Despite Price Plunge
As much as it is red across the crypto space like a blood spring from a genocide act, some collectors are taking advantage of the price drop. They are riding the rule of “buy the dip.” They see this moment as leverage to obtain expensive NFTs lower than the original price. According to CryptoSlam’s report, the NFTs listed above are seeing an increase in trading volume despite the price drop.
Four days ago, the website recorded a 54% increase in the volume of NFT traded in 24 hours. And that was a better shot when you compare it to the previous 24 hours. The sales closed up to $39,000,000. This is lower compared to early May sales. However, it revealed an improved volume of trade daily.
As for the leading NFT in that category, the Bored Ape NFT trades close to $5,800,000 in sales, while the Mutant Apes sells beyond $2,800,000 worth of NFT. On the other hand, a metaverse game, Otherside, trades up to $2,300,000.
Is NFT a Digital Bubble?
2021 saw the advent of NFTs in the crypto space. It gives the artist (creator) an advantage to sell their piece in the digital space without a mediator or broker. The NFT niche in the crypto space became more popular in 2021. Since its introduction, there has been increased participation and adoption of NFTs across different sectors.
As excitement filled the air in 2021 and people jumped on the financial opportunities associated with NFTs, some were critical about its sustainability and how it appeared like another Ponzi scheme. As a result, they claim that it might be another digital bubble with significant consequences. This raised the question of NFT genuine value based on real-time utility or sentimentality.
An instance of bubbles bursting in the NFT space is Jack Dorsey’s first NFT tweet, which sold for $2,900,000. Upon relisting, the highest bid didn’t cross the $7,000 price. This shows us that NFTs without genuine utility will lose their cause and establishment. Users are becoming more critical about their participation and do not want to fall for the extreme volatility trick.
But NFTs are now changing their cause from being ordinary jpegs hyped from marketing efforts and selling big to becoming valuable assets representing a significant part of some physical assets. As much as the market is early on NFTs, individuals are now filtering out NFT scams and asking credible questions. They are looking out for authentic and verified NFTs to engage.
What is the Future of NFTs?
Think of the wealthy individuals in this digital era; NFT collectors will be part of those that will make your list. NFTs gave the art world a new perspective and had been changing the finance sector’s operational process. As a result of increased adoption, they climbed the ladder of fast-growing assets. The essential advantage is that artists can now directly sell to their buyers without an intermediary.
However, the underlying technology behind NFTs—blockchain technology—has more to offer than digital art possibilities. The continued exploration of NFTs now draws attention to how they can be used practically in the contemporary business world. And that revolves around the features that make blockchain technology a sustainable alternative to conducting business.
In the business world, NFTs can become the new method for partners to sign new pacts for different business adventures. When you compare it to the paper-based business models, it is significantly more secure than papers that can get missing while transferring from one party to the other. Likewise, it is difficult for any party to alter or hack such a pact. Overall, it is easily transferable amongst parties.
In finance, NFTs will bring a new dimension to digital transactions across every space. Aside from the additional security it will bring to digital transactions, its transparency will eliminate identity theft. Meanwhile, you can track the entire journey of an NFT and verify every information process therein. This enhances trust amongst all parties.