NFT benefiting from Crypto winter
The cryptocurrency market has officially entered what the crypto community calls a Crypto winter. And as Bitcoin got closer to $20,000, the total liquidation per day went back up to over $200 million. Also, Ethereum, which is the second-largest coin, suffered the same fate as the foremost cryptocurrency. Despite this grim outlook, it seems investors are buying the dip. And this time it is not Bitcoin or any other cryptocurrency. Instead, investors are leveraging on this downturn to stock up on NFTs.
Due to the market crash, the prices of many NFT projects have dropped significantly. Even well-known collections like the Bored Ape Yacht Club (BAYC) were hit hard by the crypto winter. The dollar value of floor prices is also down to the floor at the moment. In fact, at the time of writing BAYC floor price is down by -49%.
Furthermore, other projects were also affected by the poor run of events. At the time of press, CloneX was at -57%, Meebits was at -54%, and Azuki was at -49%. But NFTGO says that more than 85% of the high-priced NFT transactions in the last week came from BAYC. So, this shows that investors bought BAYC’s dip.
The drop in Crypto prices has made NFTs cheaper
Well, the sharp drop in the floor price also made it cheaper for investors to buy. The floor price of Bored Apes has dropped below $100,000 for the first time in almost a year, according to data from the NFT price floor.
At the time of writing, the BAYC cost $85,500, which was a drop of 65% from its all-time high.
The number of trades on the NFT market rose by 40% in the last 24 hours compared to the previous 24 hours. But other projects like MAYC and Moonbirds went down the line.
January 2022 was the last time an Ape was traded for the $100,000 range. In addition, throughout the past twenty-four hours, the volume of NFT trades has surged as crypto-markets have plunged. In fact, CryptoSlam disclosed that the NFT market’s trading volume increased by 40 percent in the last 24 hours compared to the prior 24-hour trading window.
NFT market performed better than the wider crypto market
Now, Nansen 2022 quarterly report shows that the NFT market has done better than the wider cryptocurrency market so far in 2022, evidenced by the fact that the price of the NFT-500 Index has gone up by 49.9% in 2022.
Notably, until early May 2022, NFT trade volumes were roughly $687 million per week, a modest increase over the fourth quarter of 2021, when they averaged $620 million per week.
However, as more institutions, huge enterprises, and financial institutions enter the NFT arena, social excitement and strategic collaborations will continue to drive the market. NFTs, like other assets, are not totally resistant to bear markets. In reality, the gaming sector lost about $50 million in the NFT market.
Therefore, it is essential to conduct your own research and recognize early warning flags, especially with high-volume, user-attractive projects.