In 2021, when NFTs were all the rage, many investors loved collecting them. However, as time went on, people started losing interest and leaving the NFT world. Recently, though, NFTs have become popular again, but collectors are feeling very sad and disappointed. A person named ‘Cirrus,’ who advises the Arcade protocol, said that the NFT market has experienced the worst crash ever.
In the last few days alone, there have been about 1244 cases where people had to sell their NFTs because they couldn’t afford to keep them anymore. And that number doesn’t even include the people who had to sell because they owed money.
To give you an idea, on a normal day in the past year, only 10 to 15 NFT loans were being sold. Earlier this year, there was hope for the NFT market as big platforms like Blur, OpenSea, and Magic Eden competed and new protocols like Bitcoin Ordinals emerged.
It seemed like NFTs were recovering from the losses they suffered in 2022. But now, as the initial excitement dies down, investors are losing interest again, and this is causing problems for famous NFT projects. They are struggling to keep going, and this is making the whole industry worry about what will happen next.
NFTs are Having a Hard Time Staying Successful
While the cryptocurrency market is showing signs of improvement and investors are getting excited about a potentially successful summer, the NFT market is facing challenges and struggling to survive. NFT collections that were once highly valued are now plummeting in value, causing many investors to lose billions of dollars.
According to a recent report by Cirrus, the NFT market has experienced the most severe wave of selling in history over the past three days. More than 1200 prominent NFTs, including Beanz, BAYC, and others used as collateral for loans, have been sold off due to a significant drop in NFT prices. Snow Genesis, a website that analyzes NFTs, is now warning that hundreds more NFTs are at risk of being sold off.
Among the affected projects, Beanz has suffered the harshest blow, with over 600 of their NFTs being liquidated, which accounts for 3% of their entire collection. This serves as a stark reminder of the magnitude of the selling event and its profound impact on the market.
Despite the challenging situation, a glimmer of hope emerges as the rate of liquidations has significantly subsided in the past few hours. Numerous investors have successfully repaid their debts, and others have actively listed their NFTs for auction. Although the number of underwater loans remains relatively low, the NFT market still needs to recover to alleviate ongoing concerns.
In the past week, the floor price of several major NFT collections has suffered substantial losses, despite the broader upward trend in the crypto market. Blue-chip NFT collections, such as Bored Ape Yacht Club (BAYC), experienced a sharp drop below 30 ETH recently, marking its lowest point since October 2021. However, it has managed to rebound slightly, currently holding a floor price of 31.5 ETH.
Other notable NFT collections, including Azuki, have also faced severe repercussions, with their floor price plummeting by over 20%. Community members of Azuki are growing increasingly furious, with many contemplating legal action against the founders for their release of the ‘dilutive NFT project.’ Noteworthy projects like Pudgy Pigeons, BAKC, and Moonbirds have also witnessed significant losses during this period.
Collectors Begin to Reject NFTs
The creators of the original Azuki NFT collection unleashed Azuki Elementals, an offshoot NFT project that dramatically disrupted the NFT market. Within minutes of its launch, the project sold out, generating approximately $38 million in revenue for Chiru Labs, the Azuki creator. However, the community swiftly criticized the project for its striking similarity to the original Azuki collection, amplifying the backlash.
This intensified further due to a minting mishap, leading to allegations of scamming against Azuki. Collectors are now demanding a return on their ETH investments. Currently, the number of sellers in the Azuki and Azuki Elementals market exceeds the number of buyers, signaling a downward spiral. Azuki’s floor price, which stood above 17 ETH just a month ago, has plummeted to 6.8 ETH. Elementals initially sold for around 1.7 ETH but have now dropped to 0.74 ETH as of a day ago.
The Bored Ape Yacht Club and other major NFT collections are also feeling the effects of the current market downturn. The number of daily transactions has been decreasing, giving sellers an advantage. Currently, the price of BAYC NFTs is at its lowest point in several months. At the moment, you can find an NFT from this collection being sold for just 27.9 ETH. The last time the floor price of Bored Ape Yacht Club dropped below 30 ETH was in the latter part of 2021.
Final Thought
The recent downturn in the NFT market has led to significant losses for investors and challenges for prominent NFT projects. The market experienced the worst crash ever, resulting in a wave of selling and the liquidation of numerous NFTs. While there is a glimmer of hope as the rate of liquidations has subsided, the NFT market still needs to recover to address ongoing concerns. The floor prices of major NFT collections have suffered substantial losses despite the broader upward trend in the crypto market. This difficult period highlights the challenges the NFT market is currently facing in maintaining its success.
