NFTs
NFTs Fail to Regain Appeal as Investors Turn to New Ether ETFs
(Bloomberg) — Many investors are betting that Bitcoin and Ether will reach new highs this year, but there’s one corner of the cryptocurrency market that’s being ignored: non-fungible tokens.
Tokens, better known as NFTs, which can be digital monkey artworks or other collectibles registered on blockchains, are losing even more appeal. This month, Google searches for NFTs hit their lowest level since 2021, when the tokens started to become popular, according to Google Trends.
In the first five months of the year, NFT sales fell more than 6% to $8.5 billion from the same period a year ago, according to researcher DappRadar. In stark contrast, the industry sold $17.2 billion worth of NFTs in one month in January 2022 – its peak.
Sentiment worsened last month after the U.S. Securities and Exchange Commission took the first step toward approving exchange-traded funds that invest directly in Ether. Before approval, some investors began moving to Ether and abandoning NFTs, said Nicolas Lallement, co-founder of NFT data tracker Price Floor.
“Crypto markets are all about capital rotation,” said Lallement. “It is predictable that Ethereum will continue to attract and absorb market capital and cause price declines in other assets.”
Year-to-date, prices for many popular NFT collections are down 40% to 50%, according to the NFT Price Floor. The floor price of CryptoPunks, which are minted on the Ethereum network and bought and sold with Ether, is around 2021 levels and is down 29% from its low point last year, when the market was so bad that everyone thought that crypto winter was hitting rock bottom. Popular collections like Bored Ape Yacht Club and Snowfro’s Chromie Squiggle have rock bottom prices, based on Ether, that are about half of what they were at last year’s low, NFT Price Floor said.
“We are still seeing the majority of NFT collections continue to sell or remain stable after peak euphoria in 2021,” said Daniel Maegaard, a well-known NFT collector, in an email.
Maegaard said he recently sold several of his top-tier NFTs, including works by digital artists XCOPY, Hackatao and Coldie. Some NFT art collections from artists like XCOPY have seen positive returns over the past 90 days, according to Lallement.
Also thriving is NFT marketplace Magic Eden, which has been gaining market share as token trading on its platform increases, according to Sara Gherghelas, an analyst at DappRadar. In April, it saw record volume, although it has since declined, according to DappRadar.
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