NFT Sales Are Flatlining – WSJ

The NFT market is collapsing.

According to data website NonFungible, sales of nonfungible tokens, or NFTs, have fallen to a daily average of around 19,000 this week, down 92 percent from a peak of around 225,000 in September.

The number of active wallets on the NFT market dropped 88% to around 14,000 last week from a high of 119,000 in November. NFTs are bitcoin-like digital tokens that act like a certificate of authority. ownership lives on a blockchain.

Rising interest rates have squashed risky bets in financial markets — and the NFT is one of the most speculative.

Since hitting a November high, the tech-heavy Nasdaq Composite is down 23% and bitcoin down 43%. The Federal Reserve is expected to raise interest rates this week and next month. As the central bank’s easy monetary policies eased, investors have turned to more defensive stocks as consumer staples.

Many NFT holders find their investments to be worth significantly less than when they purchased them.

NFT of the first tweet from Twitter Inc.

co-founder Jack Dorsey sold in March 2021 for $2.9 million to Sina Estavi, the chief executive officer of Malaysia-based blockchain firm Bridge Oracle.

Earlier this year, Mr. Estavi put the NFT up for auction. He did not receive any bids above $14,000, which he did not accept.

Mr. Estavi said the failure of the auction was not a sign that the market was deteriorating, but just a normal upheaval that can happen in any market. The NFT market is a growing market, he said, and it is impossible to predict what it will look like in a few years.

“I will never regret buying it because this NFT is my capital,” he said.

Another NFT buyer purchased an NFT managed by Snoop Dog, titled “Doggy #4292” in early April for approximately $32,000 worth of crypto ether. The NFT, an image of a blue-skinned astronaut standing on what looks like a star on the Hollywood Walk of Fame, is currently being auctioned off with an asking price of $25.5 million. The current highest bid is 0.0743 ether — around $210.

Nonfungible token sale volume by category, daily

Avatars, animals and other digital assets

In-game items such as equipment or weapons

Work done manually or calculated

Accessories, real estate and other items used in

Virtual World

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Avatars, animals and other digital assets

In-game items such as equipment or weapons

Work done manually or calculated

Accessories, real estate and other items used in

Virtual World

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Avatars, animals and more

Digital Assets

In-game items such as equipment

or weapon

Work done manually or calculated

Accessories, real estate and other items

used in the virtual world

blank

Avatars, animals and

other digital assets

In-game items such as

equipment or weapons

The work is handmade or

calculate

Accessories, real estate

and other items used in

Virtual World

blank

Avatars, animals and

other digital assets

In-game items such as

equipment or weapons

Handcrafted work

or calculate

Accessories, real estate

and other items used in

Virtual World

That lack of interest is not unique. Interest in NFTs as measured by the number of searches for the term peaked in January, according to Google Trends, and has fallen about 80% since.

The imbalance between supply and demand is also harming the NFT market. According to data from analytics firm Chainalysis, there are around five NFTs per buyer. As of the end of April, 9.2 million NFTs had been sold, bought by 1.8 million, the company said.

The largest US crypto exchange is still betting on NFT. Coinbase launched its beta site last month and four million people have signed up. It will allow users to connect existing wallets to the website and buy and sell NFTs, initially with no transaction fees, and to generate NFTs through the website.

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The profile of the NFTs as part of fervent advocacy skyrocketed in 2021 as musicians, artists, celebrities, and companies jumped on board. Artist Beeple sold an NFT attached to his artwork for $69 million. Adidas AG and Nike Inc.

casting and selling NFTs attached to their sneakers. McDonald’s Corp.

sold an NFT tied to its McRib sandwich reissue.

There are indications that collectors can also distinguish between NFTs that catalog a wide range of animated characters — like CryptoPunks — and niche NFT art projects, driven by major artists. , who have loved the museum.

Among the artists who double on NFT art is artist Jeff Koons from New York. The artist known for his oversized hot air balloon animal sculptures is selling a series of NFTs tied to a real-life sculpture he plans to launch a rocket to the moon later this year. His gallery, Pace, says his moon sculptures tied to NFTs are selling well in bundles for $2 million each.

The proliferation of play-for-money video games — in which players trade NFTs — provides a glimpse into how the metaverse might attract users with monetary rewards and possible feedback with it. Artwork: Josephine Chu

Earlier this month, the NFT art platform TRLab said it only took one minute for Chinese artist Cai Guo Qiang, who is internationally known for creating works using gunpowder, to sell out the 7,000 NFT series for allowing buyers to help create their own digital fireworks display. .

Zach Friedman, co-founder and chief executive officer of crypto brokerage Secure Digital Markets, said that what makes NFTs stand out today is some of the perks or conveniences attached to them.

Director Kevin Smith plans to sell 5,555 NFTs tied to an upcoming film, “Killroy Was Here.” Only NFT holders have access to movies.

A band called The Crystal Method is auctioning off NFTs tied to a new song that includes backstage tickets to the concert and dinner with the band.

“Companies will continue to focus on utility,” Mr. Friedman said.

—Kelly Crow contributed to this article.

Write to Paul Vigna at Paul.Vigna@wsj.com

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https://www.wsj.com/articles/nft-sales-are-flatlining-11651552616?mod=rss_markets_main NFT Sales Are Flatlining – WSJ

Edmund DeMarche

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