Cryptoverse: Bonfire of NFTs

Cryptoverse: Bonfire of NFTs
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July 5 (Reuters) – The NFT dream is not dead, but a major non-performance has been beaten.

The market shined spectacularly last year as crypto-rich speculators poured billions of dollars into risky assets, driving up prices and profits. Now, six months into 2022, it looks ugly.

Monthly sales at OpenSea, the largest NFT market, fell from $2.6 billion in May to $700 million in June, well below January’s peak of nearly $5 billion.

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According to, which tracks sales on the Ethereum and Ronin blockchains, the average NFT sale at the end of June fell to $412 from $1,754 at the end of April.

“The crypto bear market has definitely impacted the NFT space,” said Gauthier Zuppinger, co-founder of

“We’ve seen so much speculation, so much hype around these types of assets,” he said. “Now we’re kind of seeing a decline because people are realizing they’re not going to be millionaires in two days.”

The NFT market has collapsed along with cryptocurrencies, typically used to settle assets, as central banks raise rates to fight inflation and risk appetite declines.

Bitcoin is down about 57% and ether is down 71% in the first six months of the year.


For critics, the crash confirms the folly of acquiring such assets, blockchain-based records linked to digital files like images or videos, often works of art. read more

Last year, the Malaysian businessman who bought the NFT of Jack Dorsey’s first tweet for $2.5 million struggled to get bids above a few thousand dollars when he tried to resell it in April. read more

But Benoit Bosc, global head of product at cryptocurrency trading firm GSR, sees the recession as the perfect time to build a corporate NFT collection — the cryptocurrency equivalent of the fine art that traditional banks display to impress clients.

Last month, GSR spent $500,000 on NFTs, which Bosc calls “blue chip” collectibles — collectibles with a large online fan base.

Among its acquisitions is Bored Ape Yacht Club’s NFT, a collection of 10,000 cartoon monkeys developed by US-based company Yuga Labs and promoted by celebrities such as Paris Hilton and Jimmy Fallon.

Such is the hype surrounding Bored Apes that Yuga Labs raised $285 million in April by selling tokens it said could be exchanged for land in a yet-to-launch Bored Apes-themed virtual world. read more

According to market tracker CryptoSlam, Bored Ape’s average sale price has halved since its January peak of $238,000 in June, falling to around $110,000.

Bosc has set up three screens in his New York office to display his NFTs, which include a variety of pixelated characters and a Bored Monkey purchased for $125,000.

“For us, it’s also a branding exercise,” Bosc said. Owning a valuable NFT and using it as a profile picture on social media is a way to build “respect, authority and influence” in the cryptosphere, he said.


Nevertheless, the future of NFTs is clearly uncertain, as the era of low interest rates that encouraged investors to make risky bets is coming to an end.

Some market observers say that the impact of NFTs on the art market will diminish. Meanwhile, while the much-hyped vision for a blockchain-based metaverse has yet to materialize, enthusiasts expect NFTs to shake up the gaming industry, for example by allowing players to own in-game assets like avatar skins. read more

“Everyone believes that gaming will be the next big thing in blockchain,” said Modesta Masoit, chief financial officer of blockchain tracker DappRadar.

This risky combination of gambling and financial speculation can be problematic. According to John Egan, CEO of technology research firm L’Atelier, most players prefer games that do not include NFTs or “play-to-win” components.

While new cryptocurrency regulations agreed by the European Union last week largely exclude NFTs, Spain is separately seeking to restrict video games from selling virtual assets for real money. read more

Meanwhile, Axie Infinity, the largest NFT-based game, has seen its in-game token drop to less than half a cent from a peak of 36 cents last year.

For L’Atelier’s Egan, the NFT market is unlikely to recover to its current form.

“Essentially, this is a situation where extraordinary amounts of money are being paid for extraordinarily limited assets that are not really generating any cash flow,” he said.

But the core concept of creating unique digital assets is still “fundamentally important” and will have “massive applications” for the financial sector in the future, he said.

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Reporting by Elizabeth Howcroft; Edited by Pravin Char

Our standards: Thomson Reuters Trust Principles.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and freedom from bias in accordance with its Principles of Trust.

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