So when NFTs started to get attention, people rushed into the action to ride the wave. Beeple sold one NFT for $69.3 million and since then other NFTs like Bored Apes and CryptoPunks have sold for millions of dollars.
However, the value of NFTs is falling even faster than that of cryptocurrencies, leading some to wonder if the era of NFTs is over. But before jumping to conclusions, here’s what you need to know.
The current state of the NFT market
Right now, the NFT market is bleak to say the least. NFTs became popular in 2021, with their capitalization exceeding $40 billion in that year, and the market is expected to reach $122.43 billion in 2028. Today, however, NFTs are barely generating revenue due to oversaturation and a general plunge in cryptocurrency prices.
The leading NFT marketplace, OpenSea, for example, recorded a trading volume of $2.7 billion on May 1. However, as of August 28, the marketplace had a trading volume of $9.34 million, according to DappRadar.
Since many Bored Ape Yacht Club (BAYC) and CryptoPunks NFT owners have used them to take out ETH loans, lending platform BendDAO would need to liquidate up to $55 million worth of NFTs to recoup its loans. If that happens, NFT holders might start selling.
The bright side…
This could eliminate low-quality NFTs, which is a must. The NFT market is truly saturated with content since anyone can create and post an NFT for sale. In addition, NFTs have been affected by rampant fraud and markets have suffered major hacks.
The current slowdown is an opportunity for NFT marketplaces to filter out low-quality NFTs and publish only the best work. Additionally, past hacks could highlight weak spots that should be addressed to create a safer environment.
In the end, it is impossible to know what will happen to NFTs, but it is still too early to speculate on the bursting of the NFT bubble.
Be vigilant and consult your financial adviser before making any investment decision. Mirror-Mag cannot be held responsible in the event of bad investments. Before using any third-party service, you should do your own research.
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NFT: Is the bubble bursting? Answer with shocking numbers! – Mag Mirror
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