Decline of CryptoPunks and Bored Apes NFTs Despite Crypto Rally Causes NFT-500 Index to Fall
NFT Market Sees Decline Despite Crypto Bull Market
The NFT sector, which includes popular collections like CryptoPunks and Bored Apes, is experiencing a downturn despite the broader crypto market showing signs of a potential bull-market phase.
Negative Performance of NFT Market
The Nansen NFT-500 index, which measures the valuation of the top 500 NFTs, has seen a significant 50% decline year-to-date when measured in Ether (ETH) and a 16% drop in US dollar terms. Moreover, the Blue-Chip 10 index, which focuses on the most popular NFT collections, such as CryptoPunks and the Bored Ape Yacht Club (BAYC), is down by 44% in ETH terms and 1.7% in USD.
Nick Ruck, chief operating officer of ContentFi, attributed the subdued NFT market performance to the negative correlation between NFT prices and the price of ETH. He commented that NFTs have survived their initial market cycle but haven’t witnessed a new technological breakthrough or significant user interest, unlike popular decentralized finance (DeFi) protocols such as Uniswap.
Potential for Growth in NFT Market
Despite the overall dip, there are signs of growth in the NFT market, particularly in NFTs based on utility in gaming rather than simple JPEGs, and in the Bitcoin Ordinals space. Ruck also noted that entities from outside the crypto sector are currently exploring ways to get involved in the Ordinals craze.
“Bitcoin ordinals is not only a breakthrough for Bitcoin utility, but also a hub that brings communities together,” Ruck said, highlighting the increasing interest in this area. “Everyone found a common ground and wants a piece of it.”
Conclusion
The NFT market, despite showing a decline in recent times, still holds potential for growth in certain sectors. With a negative correlation between NFT prices and the price of ETH, the market is facing challenges, but there are opportunities for innovation and expansion, particularly in gaming and the Bitcoin Ordinals space.
In conclusion, while the broader crypto market is showing signs of a potential bull-market phase, the NFT sector is experiencing a contrasting trend, with a significant decline in valuation of top NFTs. Despite this, there is potential for growth in certain sectors, indicating that the NFT market still holds opportunities for innovation and expansion.
I have over 10 years of experience in the cryptocurrency industry and I have been on the list of the top authors on LinkedIn for the past 5 years. I have a wealth of knowledge to share with my readers, and my goal is to help them navigate the ever-changing world of cryptocurrencies.
