NFTs Sell-Off: Will The Digital Collectables Survive The War?
Investment3 Minutes Read

NFTs Sell-Off: Will The Digital Collectables Survive The War?

March 23, 2022 Share

The value of digital tokens or NFTs has dropped by almost 50 per cent, renewing doubts over the hype-fuelled market due to real-world conflict in Ukraine.

Everyone is talking about the famous online digital NFTs. If you haven’t already heard of the term, where have you been hiding? It is the talk of the town – well, more like the talk of the metaverse.

Digital items known as non-fungible tokens (NFTs)  burst into mainstream culture last year. Several animal collections, including Bored Ape Yacht Club, Cool Cats and Pudgy Penguins, spiked in price, aided by celebrity endorsements and social media hype. 

By the end of 2021, nearly $ 41 billion had been spent on NFTs – making the market almost as valuable as the global art market. For example, in 2021, NFTs became dinner table talk after a Beeple piece sold for $69.3 million in crypto at a Christie’s auction. 

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By Michael J. Casey

As a person interested in NFTs, you know how they revolutionise the way we perceive our world by bridging our tangible and virtual realities.

But almost as rapidly, large portions of the market have begun to deteriorate, leaving novice investors with significant losses and raising questions about the long term outlook for NFTs.

The average selling price of an NFT dropped more than 48 per cent since a November peak to around $ 2,500 over the past two weeks, according to data from the NonFungible website.

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The Desperate ApeWives NFT collection is on display at Art Basel Miami on Dec. 1, 2021. Erika Goldring

Daily trading volumes on OpenSea, the biggest marketplace for NFTs, have plummeted 80 per cent to roughly $ 50 million in March, just a month after they reached a record peak of $ 248 million in February.

Meanwhile, the number of accounts buying and selling NFTs weekly has dropped to about 194,000, according to NonFungible. The number of accounts hit a peak of 380,000 last November.

According to a Financial Times analysis of OpenSea, the average price of a Bored Ape NFT has fallen 44 per cent since the war in Ukraine began as investors pull back from trading colourful cartoons.

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“There has been so much noise and scams in the NFT space; this crypto winter gives the sector time to build technology that works and educate,” said Fanny Lakoubay, a cryptocurrency art and NFT adviser. “This industry is still very much under construction.”

Like most stock investments, the inflated buying and selling can only be supported for so long before interest wanes and prices plummet. 

Most NFT investors and holders say, “don’t get too caught up in getting to the peaks and be mentally prepared for the valleys to come.”

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Photo by Author — Courtesy various NFT projects

Hundreds and thousands of predictions have been pouring in on the internet. Mainly speculation so far, but let’s hope the war ends soon.

The stock market is like a crazy rollercoaster flying up and then spiralling down. 

You never know what might happen next. But all I’m saying is – be careful with your coins out there.