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As cryptocurrency prices fall, the value of NFTs falls.

by crypto gilb 2 months ago in nft
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NFT values are falling alongside traditional crypto values.

NFT values are falling alongside traditional crypto, according to one expert, and this is just the latest chapter in the ongoing "crypto winter" saga.

The floor price, or the lowest price at which a so-called blue chip NFT can be purchased. NFT According to Nansen, the price of Bored Ape Yacht Club has dropped 14% in the last 24 hours, while Mutant Ape's floor price has dropped 16%. Meanwhile, the floor price of Otherdeed for Otherside has dropped by 20% in the last 24 hours.

The drop comes as bitcoin and other cryptocurrencies fell 10% or more on Monday, owing to rising expectations of more aggressive Federal Reserve rate hikes, and serves as a reminder to retail investors, according to one expert, to exercise caution before investing in volatile non-fungible tokens.

"As with any investment opportunity, retail investors should exercise caution when investigating NFTs," William Je, CEO of Hamilton Investment Management and Founder of Himalaya Exchange, a global digital crypto exchange, told Yahoo Finance. "Blue chip NFT collections, such as Bored Ape Yacht Club, are also experiencing a downturn as the NFT's minimum price has dropped below $200,000, indicating that even the most sought-after collections are beginning to fall."

Overall, the value of NFTs has fallen this year as sales have slowed. Following its best year yet in 2021, NFT sales volumes fell nearly 50% in the first quarter of this year, with resale profit volume falling 3%, according to a quarterly report by NonFungible, which tracks NFTs. The volume of buyers and sellers has slowed as the collectible market has become saturated with NFTs. According to the quarterly report from blockchain analytics firm Nansen, 1.2 million NFTs were issued as of February.

Je cautioned that NFTs are still a young and largely unknown market, and that investors are tightening their investment belts across the board. What happens is that people panic, but then there are huge recoveries instantly.”

When purchasing NFTs, Starkov recommends trusting the project's founders and looking at their track record. He advised prospective buyers to join an NFT community but not buy in right away or succumb to FOMO. When it comes to investing, Starkov recommends holding rather than flipping.

"The best way for NFT holders to capitalize on their NFTs' IP rights is to hold their NFTs and allow the NFT project to develop," he said. "I think the worst thing you can do is keep flipping your NFTs because you'll miss out on having access to IP rights that you can capitalize on if the project turns into something big, depending on what it is."

Starkov believes that the value of NFTs will rise as new prospective buyers enter the NFT space.

"New wealth is entering the NFT marketplace," he stated. "There are large Web 2.0 companies collaborating with some of the largest NFT collections." When that happens, it becomes a huge option."

When measured in ETH, the damage isn't quite as severe: the Bored Ape price floor has dropped nearly 11% to around 74.5 ETH. Nonetheless, the project's value has plummeted in the last month and a half. On April 29, the cheapest Bored Ape was 152 ETH, which was about $429,000 at the time.

According to DappRadar data, the NFT market reached $25 billion in trading volume in 2021 and is on track to surpass that figure this year. OpenSea, the leading marketplace, had its single best day just over a month ago, with $476 million in Ethereum NFT sales on May 1.

However, NFT trading volume fell sharply early last month as crypto prices began to fall, and the NFT market has struggled since. Nonetheless, DappRadar recently reported that the NFT market appears to be resilient—though market uncertainty has also resulted in a slew of nihilistic, experimental projects such as Goblintown and ShitBeast.


About the author

crypto gilb

Blockchain technology will change the world. Cryptocurrencies are just a tool for that change.If you can’t explain it to a six-year-old, you don’t understand it yourself.

Instagram: @cryptogilb

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