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Distorted investors, the NFT market is gradually collapsing?

The number of active wallets on the NFT market dropped 88% to around 14,000 last week, from 119,000 in November. NFTs are bitcoin-like digital tokens that act like a certificate of authority. owned on a blockchain.

Rising interest rates have crushed risky bets in financial markets. And the NFT is one of the most speculative.

Distorted investors, the NFT market is gradually collapsing?  - Photo 1.

Many NFT holders find their investments to be worth significantly less than when they were bought.

Since hitting a November high, the tech Nasdaq Composite is down 23% and bitcoin down 43%. The Federal Reserve is expected to raise interest rates this week and all of next month. As the central bank’s accommodative monetary policies ended, investors turned to more defensive stocks as consumer staples.

An NFT of the first tweet from Twitter co-founder Jack Dorsey sold in March 2021 for $2.9 million. This NFT buyer is Sina Estavi – CEO of blockchain company Bridge Oracle based in Malaysia.

Earlier this year, Estavi put NFT up for auction. He did not receive any bids above $14,000.

Mr. Estavi said the failure of the auction was not a sign that the market was deteriorating, but just a normal upheaval that can happen in any market.

The NFT market is a growing market, he said, and it is impossible to predict what it will look like in a few years.

“I will never regret buying it because this NFT is my capital,” he said.

Another NFT buyer purchased an NFT for about $32,000 in ether in early April. This NFT is managed by Snoop Dog, named “Doggy #4292.

NFT, a blue-skinned astronaut standing on what looks like a star on the Hollywood Walk of Fame, is currently up for auction with an asking price of $25.5 million. The current highest bid is 0.0743 ether (about $210).

That indifference is not unique. Interest in NFTs as measured by the number of term searches peaked in January (Google Trends) and has dropped about 80% since then.

The imbalance between supply and demand is also harming the NFT market. According to data from analytics firm Chainalysis, there are around five NFTs per buyer. As of the end of April, there were 9.2 million NFTs sold, 1.8 million buyers.

The largest US crypto exchange is still betting on NFT. Coinbase launched its beta site last month with four million subscribers. Allows users to connect existing wallets to the website and buy and sell NFTs, with no initial transaction fees, and generate NFTs through the website.

The profile of NFTs has skyrocketed in 2021 as musicians, artists, celebrities, and companies step in.

Artist Beeple sold an NFT attached to his artwork for $69 million. Adidas AG and Nike Inc. minted and sold the NFT attached to its sneakers. McDonald’s Corp. sold an NFT tied to the reissue of the McRib sandwich.

There are indications that collectors can also distinguish between NFTs in the catalog of a wide range of cartoon characters such as CryptoPunks. Furthermore, NFT art projects are consistent, driven by great artists who love this treasure.

Among the artists who doubled the number of NFTs was Jeff Koons from New York. This artist is famous for his oversized hot air balloon sculptures.

He is selling a series of NFTs tied to a real-life sculpture that he plans to launch a rocket to the moon later this year. His gallery, Pace, says his moon sculptures tied to NFTs are selling well in bundles for $2 million each.

The proliferation of play-to-earn games in which players trade NFTs, has provided a glimpse into how the metaverse can attract users with monetary rewards and the responses that may come with it. it. Artwork: Josephine Chu

Cai Guo Qiang from China is internationally known for creating works using gunpowder. Earlier this month, NFT art platform TRLab said it only took him a minute to sell off the 7,000 NFT series. This NFT allows buyers to help create their own digital fireworks display.

Zach Friedman, co-founder and CEO of crypto brokerage Secure Digital Markets, said that what makes NFTs stand out is because of some of the perks or conveniences attached to them.

Director Kevin Smith plans to sell 5,555 NFTs tied to an upcoming film, “Killroy Was Here”. Only holders of this NFT have access to the movie.

A band called The Crystal Method is auctioning off an NFT tied to a new song, which includes backstage tickets to the concert and dinner with the band.

“Certainly publishers will continue to focus on utility even more,” said Mr. Friedman.

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