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NFT bubble gets that shrinking feeling -Breaking

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© Reuters. FILE PHOTO – A viewer takes a photograph in front of the video installation, “Glows in the Night”, by Yang Yongliang (Chinese contemporary artist). The NFTs will then be auctioned at Sotheby’s online.

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(This story rectifies APRIL 5 story, to replace the final chart after Nansen’s data provider made an error with their data.

By Elizabeth Howcroft

(Reuters) – Although the NFT bubble has not burst, it could have sprung a leak.

This wild and strange market, one year ago, sold for $69.3 Million in cryptocurrency at Christie’s Auction House.

OpenSea sales, NFT’s largest marketplace, reached almost $5 billion in January. This is a huge leap over the $8 million last year, and fell to $2.5 billion last month.

Market tracker CryptoSlam reported that around 635,000 NFTs sold last month. They cost $427 per unit on average. This is down from the January figure of 948,000 at $659.

The trendy “metaverse” continues to attract companies. Here digital assets such as virtual land or clothing can be purchased for NFTs and other cryptocurrency. JPMorgan (NYSE 🙂 and HSBC have both opened virtual spaces in NFT-based universes this year. YouTube and Instagram have NFT plans.

Pablo Rodriguez Farile, a Miami-based digital arts collector, stated that the excitement and enthusiasm that they had during certain times last year are not present anymore. “I think we achieved something that wasn’t sustainable.”

He said, however that sales had increased in the past few weeks.

Graphic: NFT sales on OpenSea- https://fingfx.thomsonreuters.com/gfx/mkt/zjvqkdodgvx/Past%20the%20peak.png

Modesta Masoit is the director of finance & analytics for NFT research firm DappRadar. He said that although there was no overall market decline, it was actually consolidating after its explosive growth. Modesta also mentioned that some investors may be more cautious following Russia’s invasion in Ukraine late February.

She said, “Everybody expected that there would be a consolidation phase.” It’s consolidating, not disappearing.

DappRadar estimates that overall NFT sales reached $11.8 billion in 2022. That excludes sales of $19.3 trillion from a platform believed to be dominated primarily by irregular trades where small amounts of accounts swap items between each other for high prices.

Graphic: Daily NFT volumes- https://fingfx.thomsonreuters.com/gfx/mkt/xmvjoqeqwpr/Daily%20volumes%20drop.png

BEAVER TO BULL

The NFTs are dangerous and exotic.

In volatile markets, where asset values are dependent on social status, prices can plummet dramatically following an initial spike.

Bonhams head of digital assets Nima Sarghi said that unlike traditional art markets, the NFT marketplace can switch between bull or bear cycles in as little as a week.

According to CryptoSlam, an NFT that represents a piece from Art Blocks, a compilation of abstract computer images, would average around $15,000, at peak September 2021. But it only sold for less than $4,200 last Month.

Bored Ape Yacht Club NFTs, a collection of 10,000 variants on a cartoon primate, still sell for an average price of $300,000.

Graphic: Bored Ape prices- https://fingfx.thomsonreuters.com/gfx/mkt/myvmnqxqlpr/Six%20figure%20profile%20pictures.png

Bored Ape membership – which celebrities such as Madonna and Paris Hilton did – is similar to joining an investment club that combines a member’s club with an investment program. Many buyers advertise their NFT membership on social media by using it as their profile photo.

ApeCoin, a cryptocurrency that was created last month and given to both holders of Bored Ape NFTs and the founders. According to Coinbase data (NASDAQ:), the market capital is $3.4 billion.

Raoul Pal is a former executive at Goldman Sachs (NYSE.) and wrote that he was encouraged by the token’s potential to be used in a Bored Ape NFT.

He said that social tokens were the “big thing”

Graphic: NFT indexes – https://fingfx.thomsonreuters.com/gfx/mkt/gkplgqaoevb/NFT%20indexes.png

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