While anecdotal evidence that the NFT market is beginning to cool abounds, there are no bigger red flags that what’s going on with sales and prices.
The average selling price of a nonfungible token has declined to under $2,000, compared with an all-time high of almost $6,900 on Jan. 2, according to industry data tracker NonFungible. The daily total sales average was about $26.2 million on March 3, the data show.
The tally was $160.2 million on Jan. 31. Since Feb. 24, when Russia attacked Ukraine, the average selling price has dropped by about 30%.
Nonfungible tokens — most often digital art such as cartoonish-looking apes and penguins — saw their daily average price last year go from $128 to nearly $4,000, according to NonFungible. OpenSea, the biggest NFT marketplace, recorded its best month ever in January.
Since then, prices have steadily retreated as concern about an easing of pandemic era stimulus and geopolitical tensions weighed on the entire crypto market. The decline has only accelerated since Russia invaded Ukraine.
“What I would say is the last week or so has seen a significant decline — perhaps as much as 40% — in floor prices for the most desirable NFTs,” said Aaron Brown, a crypto investor who writes for Bloomberg Opinion.
Another possible contributor to the decline is the likelihood of increased regulation. The U.S. Securities and Exchange Commission is scrutinizing creators of NFTs and the marketplaces where they trade to determine if some of the assets run afoul of the agency’s rules, Bloomberg reported Wednesday.
Sales of some of the most popular brands are falling fast. NBA Top Shot’s are down 26% in the past week, while Axie Infinity’s are down 15%, according to data tracker DappRadar. While those flagship NFT sales are off, the decline isn’t across the board. Sales of Bored Ape Yacht Club NFTs are up 59% in the past seven days, while CryptoPunk sales are up 118%, DappRadar data show.
Many NFT marketplaces have experienced trading-volume declines. OpenSea’s trading volume is down 30% in the last seven days, per DappRadar. Rival platform LooksRare’s volume is down 16%. Even popular game Axie Infinity’s volume is down 21%, per DappRadar.
“Trading volumes are down in general, but the demand measured by the number of unique traders and sales count is increasing,” said Pedro Herrera, senior data analyst at DappRadar. “So while we’re seeing less volume, there’s more activity, even though Ukraine’s conflict is definitely driving away the attention from trading.”
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