NFT is caught in a deep bear vortex "NFT business narrative" is facing great changes

Data shows that as the frenzy for chasing meme coins gradually turns to the frenzy for spot trading funds, in the first week of the second half of 2023, NFT sales fell by 23.39% compared to last week, marking a two-week consecutive decline. Total NFT sales are currently $195.95 million, of which Ethereum-based NFT sales are $130.77 million. In the past 7 days, the total market value of NFT fell to 6.066 billion US dollars, a decrease of 1.24%, and the total transaction volume fell to 131 million US dollars, a decrease of 46.05%.

The reserve price of the famous BAYC NFT collectible reached 27.4 ETH (approximately $53,000) — a 20-month low. The bottom price of the Bored Ape Yacht Club NFT fell below 30 ETH, reaching its lowest point since October 2021. The drop marks a 90% decline since April 2022's all-time high of 153.7 ETH. The overall NFT market had a tough time in June, and the Blur market may have contributed to the decline. Reserve prices for BAYC NFT collectibles reported their lowest figures in 20 months.

However, BAYC is not the only NFT collectible company facing a decline in reserve prices. In fact, June was a tough month for the NFT market as a whole, with NFT trading volumes down $31.3 million in June compared to May. Many collectors are still battling the bear market, including A-list stars. The perfect example is Justin Bieber, who purchased a BAYC NFT in January 2022 for a staggering $1.31 million.

Some people think that the decline in sales in the NFT market is due to the airdrop activities and the zero-royalty policy of Blur in the NFT market disrupting the original relatively stable price structure. According to the number of active users, OpenSea still has a huge number of active users in the current environment, while Blur has less than one tenth of OpenSea’s active users. However, after the collapse of the Azuki incident, the market began to find out that this is not the case.

Azuki launched a new series of Elementals, withdrawing 20,000 ETH from the NFT market, and the quality of the drawing was seriously lower than expected. Under the double influence of the cash-out incident with the team, both funds and confidence in the entire NFT market collapsed, which in turn led to a rise in the price of blue-chip NFTs. fell sharply. Since June 27, Azuki floor prices have fallen by about 47%, BAYC has fallen by 20%, MAYC has fallen by 18%, and Crypto Punks has fallen by 9%.

Traders believe that NFT is mainly affected by its liquidity. Due to the poor liquidity of the current NFT market, the lending market usually adopts auctions to liquidate collateral, and the liquidation time lasts for several days. In this way, if there is an extreme market, NFT Lending agreements may have a large number of bad debts, and these bad debts need to be paid by the agreement or depositors. A series of falling events is actually caused by the market's loss of confidence in NFT and the collapse of consensus.

In the market that continues to decline, the market desires to trade NFT, an asset that is relatively scarce in liquidity and has a single purpose. Data shows that more than 80% of BAYC and CryptoPunks have not been sold once in 2023. The current NFT market is extremely illiquid, and various thunderstorms and negative events have completely wiped out the patience and motivation of NFT held in the market. The entire market has been dug into the abyss, and it is not only ordinary traders who are affected, but also celebrities who rushed to the sea in the early days.

Except for the Justin Bieber mentioned above, the JJ Lin we are familiar with has started buying NFTs since 2021, and owns 111 digital collections including but not limited to BAYC, CryptoPunks, Azuki, etc. In the past month’s turmoil, JJ Lin The value of the NFT portfolio dropped from 152.71 ETH to 91.12 ETH, with a cumulative loss of 40%.

The data shows that Xu Jinglei has over 400 collections in 2022, and now holds more than 1,300 collections, including BAYC, Azuki, and MAYC, DeFi Apes, 6Sixty6 and other series. If the data is true, according to the current Xu Jinglei NFT combination Value estimation, I am afraid that it has lost more than 1 million US dollars. Similar situations are too numerous to mention. NFT cannot be just a Token with an artistic coat, but is also limited by market liquidity. If this situation continues to develop, NFT will sell pictures as the only business model The narrative may no longer be sustainable.