NFTs Soared in 2021. Now They're Sinking

The $NFT market appears to be suffering from the bearish sentiment prevailing in the broader crypto and traditional markets. Trading volumes on the largest $NFT marketplace OpenSea are trending down, while floor prices of many so-called blue-chip NFTs keep falling. 

Blue Chip NFTs Suffer in Market Drawdown

After a mainstream explosion throughout early 2021 and the beginning of this year, the $NFT market is bleeding in the latest crypto downtrend. The floor prices of many high-value NFTs have dipped since hitting all-time highs around the end of January.

Despite a strong start at the beginning of the year, the floor prices for most of the top blue chip $NFT projects fell throughout the entirety of February. Bored Ape Yacht Club, arguably the most sought-after $NFT project of all, is among the hardest hit, tanking roughly 40% in Ethereum-denominated terms since the beginning of February.

In dollar-denominated terms, the recent price action for Bored Ape Yacht Club NFTs is even worse. At the all-time high prices reached at the end of January, the cheapest JPEG from the cartoon monkey collection would’ve set buyers back 118 Ethereum worth around $436,000 at the time. The floor price for the collection today is around 72 Ethereum, or $182,000. That’s a 58% decline in dollar terms. 

CryptoPunks, the second most valuable $NFT project by market capitalization, hasn’t fared any better. The Larva Labs collection hit an all-time high floor price of around 123 Ethereum in October and is currently trading at around 66.5 Ethereum. As Ethereum is also down since October, CryptoPunks have lost around 60% of their dollar value. 

Other in-demand, albeit newer and less-established projects like Doodles, Azuki, and Invisible Friends also experienced price drops over the last 30 days. Doodles is down to 10.35 Ethereum after hitting a high of 16.25 Ethereum, while Azuki and Invisible Friends have both also tumbled. 

The plunge in floor prices for blue-chip NFTs also coincides with a similar reduction in trading volumes. Per Dune Analytics data, the largest $NFT marketplace, OpenSea, hit a peak of $4.95 billion in volume in January, but activity slowed in February with the total volume hitting $3.5 billion. 

Looking at daily volumes, the chart shows a consistent downtrend. Yesterday, for example, OpenSea saw its slowest day of trading activity over the last 100 days, with volume at around $48 million. For comparison, on Jan. 31, the best day for the marketplace over the same period, OpenSea saw almost $360 million in trading volume for the day.

The second-largest $NFT marketplace and direct OpenSea competitor, LooksRare, also saw its trading volume sink in the second half of February, despite orchestrating an aggressive liquidity mining event to attract as many $NFT traders to its platform as possible. The platform’s trading activity has subsided from staying consistently above $400 million in daily volume in the first half of January to an average daily volume of around $70 million over the last ten days.

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.