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NFT Marketplace Tokens Hit Hard as Bitcoin Rally Retreats

source-logo  blockworks.co 22 February 2023 07:25, UTC

NFT marketplace-related utility and governance tokens took a beating Tuesday, cementing itself as one of the industry’s worst-performing categories on the day as the broader market’s rally hits pause.

Tokens tied to NFT marketplaces Blur, LooksRare, SuperVerse, Rarible, X2Y2 and Sudoswap have fallen deeper in the red on a 24-hour basis as interest in the niche digital asset sector has begun to taper off.

Governance tokens for digital collectibles marketplaces fell between 4 to 16%, including SuperVerse’s (SUPER), Blur’s recently launched BLUR, Rarible’s (RARI) and Sudoswap’s SUDO.

Despite Blur’s booming volumes of late amid “speculative” tokenomics, Andrii Yasinetsky, chief executive of NFT data firm Mnemonic, told Blockworks the unwinding interest is expected.

“It’s just the reflection of a broader sentiment that people got tired of these trading-focused schemes,” Yasinetsky said. “The market wants to see broader adoption of Web3 and NFTs through all kinds of consumer experiences now.”

Ethereum-based token SUDO launched 60 million tokens via an airdrop last week around the same time as Blur’s token launch. SUDO is down about 26% since Feb. 19 while Blur is still posting green — good for about 60% over the last seven days.

Decentralized NFT marketplace utility tokens of LooksRare and X2Y2 also shed between 6% and 13% on the day, CoinGecko data show. Both are down 23% and 56%, respectively, on a weekly basis.

It comes as bitcoin (BTC) shunned resistance near $25,000 on Tuesday after springing to life last week. Bitcoin is up more than 14% on a weekly basis — but remains down about 2% on the day after retreating from local highs not seen since August of last year.

Also in the last 24 hours, the industry’s total market value has fallen 2.2% to $1.15 billion from 1.18 billion — while bitcoin inflows to exchange wallets jumped 40% on Monday, data provided by IntoTheBlock show.

Surges in incoming exchange transactions often dovetail with episodes of heightened market turbulence. The correlation may indicate that some holders are seeking to book a profit by liquidating their assets on centralized exchanges