You need a parachute if you like to get high – And NFTs have gotten high. Maybe too much, and too fast.
The nft bubble, the term that means nothing
The term “bubble”, internet bubble, Bitcoin bubble, NFT bubble is used, sometimes wrongly, often wrongly, very rarely rightly. As soon as something goes well, when it goes down (or falls), the phrase on everyone’s lips is “the bubble has burst”.
Is this really the case for NFTs (Non Fungible Token)? If we look at the figures, indeed the sales of NTFs are falling. For example, Opensea: the biggest current NFT sales platform, after a strong start in mid 2021, saw its figures skyrocket until May 2022, and since then, it’s been a downfall. The platform went from over $400 million in transactions, to $5 million on August 28.
If we look at the main players of the platform, namely Bored Ape Yacht Club and Cryptopunks, we can see that the curve is not going in the right direction.
The average price of a monkey over 90 days is 99 ETH, against 89 if we just compare over the last 14 days. The floor price is 77.7 ETH.
Same observation with Cryptopunks. We go from an average of 69.4 ETH over the last 90 days, to 38.5 ETH over the last 14 days. Nearly a 50% drop. January sales don’t do such a carnage.
But, is this really the end of NFT?
We must take a step back
Already, the announcement made and circulating on all networks is related to OpenSea. Even if it remains the leader on the market today, it is not the only existing platform.
So, are the competitors affected too? The answer is yes. Rarible, Solanart, LooksRare, all the sale and exchange platforms are going through a desert.
So, the problem is everywhere. But, what is it related to? Is it really a lack of interest in NFTs?
First of all, you have to keep in mind that NFTs are still something new. And when something is new and it works, then it is used everywhere, all the time and in any way. Is this current purge a bad thing when you see the number of dog-headed, dead coypu or BAYC-copied monkey NFT collections circulating? Soulless, useless collections, whose only goal is to make money for their creators before leaving with the cash register?
Second thing to consider, the market! If we look at the price of bitcoin over one year, the observation is simple.
What if this is just the beginning for nft?
And even though NFTs are mainly sold in ETH (or WETH on other blockchains), don’t be fooled. When Bitcoin coughs, everyone gets a fever! And where all the projects were working and selling a year ago in the middle of a bull-run, when the market is in doubt, many leave their wives and children to go far away with their little remaining savings.
So is this really the end of NFTs? Without a doubt, the answer is no!
Is this the end of the totally exploded NFT with zombie bunnies? Maybe! And if it is, then so much the better. But historical collections, even if they suffer a decline, will rebound when the market takes off again.
And let’s keep in mind that we’re still in the early stages of using NFTs. We have certainly only explored 3% of the possibilities offered by this technology. So let’s be patient! And let’s stop talking about a bubble every time the market price drops.