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Cryptoverse: Fire NFTs

Cryptoverse: Fire NFTs

July 5 (Reuters) – The NFT dream isn’t dead, but it’s taken a major irreplaceable hit.

The market shone brilliantly in the past year as wealthy cryptocurrency speculators spent billions of dollars on risky assets, driving up prices and profits. Now, six months into 2022, it looks ugly.

Monthly sales volume in NFT’s largest market, OpenSea, fell to $700 million in June, down from $2.6 billion in May and far from January’s peak of nearly $5 billion.

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By late June, average NFT sales had fallen to $412, from $1,754 at the end of April, according to, which tracks sales on the Ethereum and Ronin blockchain.

“The cryptocurrency market has definitely had an impact on the NFT space,” said Gauthier Zuppinger, co-founder of

“We’ve seen a lot of speculation, a lot of hype around this type of asset,” he added. “Now we’re seeing a bit of a decline just because people realize they’re not going to be a millionaire in a couple of days.”

The NFT market has collapsed along with cryptocurrencies, which are usually used to pay for assets, at a time when central banks have raised prices to combat inflation, and the appetite for risk has faded.

Bitcoin has lost about 57% in the six months of the year, while ether is down 71%.

Regression or death vortex?

For critics, the crash underscores the folly of buying such assets, tradable blockchain-based records tied to digital files such as photos or videos, and often artwork. Read more

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The Malaysian businessman who bought Jack Dorsey’s first NFT tweet for $2.5 million last year struggled to get bids for more than a few thousand dollars when he tried to resell it in April. Read more

But Benoit Bosc, global head of product at crypto-trading firm GSR, sees the downturn as the perfect time to build an NFT suite of companies — the crypto-equivalent of fine art that traditional banks offer to impress customers.

Last month, GSR spent $500,000 on NFTs from what Bosc calls “big company” groups — those with large online fan bases.

His NFT purchases include the Bored Ape Yacht Club, a group of 10,000 cartoon monkeys made by US-based Yuga Labs and promoted by the likes of Paris Hilton and Jimmy Fallon.

That’s the hype surrounding Bored Apes, which raised $285 million in April by Yuga Labs selling tokens that it says can be exchanged for land in a virtual world in the form of Bored Apes that has yet to be launched. Read more

However, the average selling price of the boring monkey fell to around $110,000 in June, having halved since its January peak of $238K, according to market tracker CryptoSlam.

In his New York office, Bosc put up three monitors to display his NFTs, which include several polka dots and a Bored Ape that was purchased for $125,000.

“For us, it’s also an exercise in branding,” Boske said. He said owning a valuable NFT and using it as a profile picture on social media is a way to establish “respect, power and influence” in the crypto space.

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game over? Did you start the game?

However, the future of NFTs is clearly uncertain, as the era of low interest rates that encouraged investors to take risky bets is over.

Some market watchers say the impact of NFTs on the art market will diminish. Meanwhile, although the vision of amplifying the blockchain-based metaverse has yet to be realized, enthusiasts expect NFT to transform the gaming industry, for example by allowing players to own in-game assets such as tokens. Read more

“Everyone thinks games are going to be the next big thing in the blockchain,” said Modesta Masuit, chief financial officer of blockchain tracker DappRadar.

This risky mix of gambling and financial speculation can run into difficulties. Most gamers prefer games that don’t include NFT or “play for profit” components, according to John Egan, CEO of technology research firm L’Atelier.

Although groundbreaking new crypto regulations approved by the European Union last week mostly excluded NFTs, Spain is separately seeking to clamp down on the way video games sell virtual assets for real money. Read more

Meanwhile, the largest NFT-based game, Axie Infinity, has seen its in-game token collapse to less than half a cent, down from a peak of 36 cents last year.

For L’Atelier’s Egan, the NFT market is unlikely to recover in its current form.

“It’s a situation where extraordinary amounts of money are being paid out for very limited assets that don’t actually produce any cash flow,” he said.

But he said the basic concept of creating unique digital assets remains “fundamentally important” and will have “huge applications” for the financial sector in the future.

(Elizabeth Howcroft reports). Edited by Praveen Shar

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The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed under the Trust Principles to impartiality, independence, and freedom from bias.