Non-fungible tokens (NFTs) are unique cryptographic tokens representing ownership of digital items. They offer various use cases, such as in-game assets, ticketing, and artwork representation. However, the NFT category is mainly associated with digital artwork, with the tokens serving as certificates of authenticity and ownership.

NFTs burst into mainstream consciousness in March 2021 with the record-breaking $69.3 million sale of Beeple’s “The First 5,000 Days.” This event sparked an explosion of NFT collections eager to ride the hype train. Among them, the Bored Ape Yacht Club (BAYC) emerged as one of the most well-known and valuable projects. However, the situation has since reversed dramatically, leading to sinking prices.

Bored Ape Yacht Club Sinks

BAYC NFTs were once the hottest ticket in town, soaring to astronomical values and flaunted by many A-list celebrity owners such as Snoop Dogg, Neymar, and Shaquille O’Neal. However, the situation has undergone a dramatic 180-degree turn, with no one flexing their Bored Apes anymore, while prices continue to drop.

The BAYC price floor has sunk to a 150-week low of 8.9 ETH, roughly $31k. The current price floor is a fraction of the 128 ETH ($358k at the time) peak achieved in May 2022, representing a staggering 93% decline over 24 months.

Since the May 2022 peak, the BAYC price continues to break below support levels, heading lower and lower. 

BAYC’s 30-day statistics show a 41% decline in trading volume to 11.5K ETH and a 27% drop in sales to 987 units, further underscoring the bearish sentiment surrounding the once-coveted collection.

The bleak outlook for BAYC mirrors the larger NFT market’s struggles, as the once-fervent hype and mania have significantly waned since the dizzying heights of 2021.

NFT Global Sales Fail to Recover

The NFT mania of 2021 has significantly subsided, as reflected in the downturn in global sales and cooling enthusiasm. Peak global sales reached $2.239 billion during the week starting August 23, 2021, closely coinciding with the prior crypto bull market peak when the market cap hit $3 trillion in November 2021.

While global NFT sales remained choppy in the aftermath of the peak, ranging between $654 million and $1.558 billion, they experienced a drastic collapse after May 2022, around the time of the Terra Luna implosion. 

NFT sales for the week starting June 10 were $106.8 million, a stark contrast to the heights reached at the August 2021 peak.

Interestingly, even as Bitcoin hit a new all-time high of $74,000 in March, no corresponding uptick was noted for NFTs, with global weekly sales experiencing a sharp drop-off instead.

On the Flipside

CryptoPunks have also suffered a sharp price decline, dropping 78% from 113.9 ETH in October 2021 to a current price of 25.45 ETH.

The Bitcoin blockchain is now the second biggest NFT chain with an aggregated market cap of $686.2 million, versus Ethereum‘s $5.3 billion.

BAYC creators Yuga Labs were awarded $1.6 million in damages in late 2023, after winning their copyright infringement case against artists Ryder Ripps and James Cahen.

Why This Matters

The downtrend in NFTs highlights how hype can influence price. While it’s too early to declare NFTs dead, returning to peak prices seems unlikely given the current activity levels.

Source : DailyCoin - Jun 19, 2024