- NFT art remains divisive, with critics blasting it as worthless.
- Global NFT sales are a fraction of their peak.
- Blue chip collections, including CryptoPunks, have shown signs of recovery.
The record-breaking $69 million sale of Beeple’s The First 5,000 Days in March 2021 catapulted non-fungible tokens (NFTs) into the mainstream consciousness. This landmark event ignited a frenzy of activity, leading to the launch of countless new NFT collections.
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However, the initial excitement has since waned substantially. Prices and trading volumes have plunged, and blue-chip collections like CryptoPunks and Bored Ape Yacht Club (BAYC) have diminished their appeal. Yet, a recent resurgence in blue chip prices has led some industry observers to suggest the market bottom is in.
CryptoPunks, BAYC See Bounce-Back
Noting the recent bounce-back in several blue chip NFTs, Su Zhu, co-founder of the defunct Three Arrows Capital crypto hedge fund, stated that Ethereum NFTs are showing signs of bottoming.
Data from NFTPriceFloor corroborated Zhu’s assessment, showing that CryptoPunks recorded a local price floor bottom of 19.7 ETH on August 5. The floor price has since rebounded to 29.45 ETH as of August 21, accompanied by a significant increase in trading volume from 233.4 ETH to 1,384 ETH over the same period.
A similar pattern has emerged for BAYC. The collection reached a local price floor bottom of 8.31 ETH on June 25, with a trading volume of 403.5 ETH. Since then, the floor price has reversed course, climbing to 12.8 ETH on August 21, albeit on a a lower volume of 249 ETH than the local bottom.
With CryptoPunks and BAYC being the top two collections by market cap, the price uptick bolds well for the NFT sector. However, some believe there’s a long way to go before the bounce-back can be called a recovery.
Global NFT Sales Still Down
Despite signs that the NFT market may be bottoming out, caution remains. YouTuber Crypto Gorilla noted the recent rise in blue-chip NFT prices but warned against premature optimism, pointing out that these assets are still down 80-90% from their all-time highs.
The YouTuber warned that the NFT market “is not out of the woods” yet, citing several headwinds to investor confidence. These included the Fed holding interest rates at 18-year highs and the absence of retail investors in crypto and NFTs.
Data from CryptoSlam revealed global monthly NFT sales continue to trend downwards. 2024’s peak sales of $1.6 billion came in March. Since then, sales have continued to fall, plummeting by 73% from the yearly top, with July sales amounting to $427.7 million.
Critics argue that NFT artwork lacks value and utility, especially since users can easily copy popular images. It remains uncertain whether NFT art has managed to shake this narrative, particularly given the ongoing sales slump.
On the Flipside
- NFT advocate Mark Cuban sold some of his collection recently, suggesting he may have decided to call it quits with non-fungibles.
- There are insufficient data points to decisively say the NFT bottom is in.
- NFT use cases extend beyond art, including ticketing and medical records.
Why This Matters
The recent signs of life in the NFT market offer hope for collectors and investors who have weathered the sector’s prolonged slump.
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