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The NFT Bubble Is Escaping as a Sales Crash

A truck parked outside Christie’s in New York on May 11 showing an NFT CryptoPunk.

A truck parked outside Christie’s in New York on May 11 showing an NFT CryptoPunk.
Photo: He was submissive (Getty Images)

The crypto world has seen one dizzying wave this year NFTs are being used to sell property from everything from online artwork to casual tweets, even if it was never clear just why the NFTs were charging such amazing prices. Boasting rights? Symbols of status? Or just pure speculation driven by cryptocurrency prices and their attendant myths of fast-paced wealth fantasies?

The current answer to the question “What is the value of an NFT” seems to be “not much and decreasing rapidly.” Crypto news site Protos said in March that one The NFTs tracked in the database ended on May 3, reserving $ 102 million in NFT transactions in one day. The seven-day period surrounding the peak brought in $ 170 million in transactions. But last week, that number dropped to $ 19.4 million in NFT sales, a 90% drop from the peak.

NFTs, or non-fungible tokens, are digital collections encoded on a blockchain, the same technology that powers cryptocurrencies, creating a unique digital watermark that signifies ownership of digital rights over an asset.

While eye-catching NFT art sales attracted most of the media attention, the market was and continues to be dominated by crypto-collection — that is, small pixel art faces. called CryptoPunks, photos called Hashmasks, and Twerky Pepes (based on the popular character of the frog that has become synonymous with both images like 4chan and the far right online). According to Protos, its data sector shows $ 9.2 million in crypto-collections sold last week. NFT “Metaverse,” as an app that allows people to shop digital real estate, sold $ 3.3 million last week. Sports memorabilia, such as basketball business cards NBA Top Shot, have also scanned the art, with $ 3.16 million in sales for the same period of time. The art has come back in all at $ 3 million.

As a matter of concern for the NFT market, Protos reported that its data set shows that participants seem to be reconsidering whether internet collections are a good use of their money:

The number of active NFT portfolios has also dropped from more than 12,000 at the daily peak of each NFT category to just 3,900 yards (almost 70% less).

NFTs are still concerned with speculation, and interest in both big-ticket items and cheaper collectors is rapidly fading. Sales are falling. The NFT bubble is out. Whether or not another NFT bubble is in its place may depend in part on whether the above apps seem more to you like mint gem comics or Pokémon cards (which maintain value due to rarity and their association with legendary brands and nostalgia) o … Beanie Babies and Franklin Mint Medallions.

U Bitcoin crash in progress of course it doesn’t help. There is also a growing focus on the disproportionate environmental costs of cryptocurrencies and NFTs, which suck up huge amounts of electricity to power cryptographic algorithms that manage blockchains, and cryptocurrency repressions in countries like China. The downward trend in Bitcoin prices could reverse itself as it has done countless times before, although the frantic boom-and-bust cycle of cryptocurrency makes it all but impossible to guess whether NFT will do the same or stop a flash in. the panetta.

However, it cannot be said no one warned you this was rubbish.

Clarification: This article has been updated to show that the data set used by Protos consists of those NFTs tracked in the database.

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