Crypto Market Downturn Leads to Steep Drop in Blue-chip Ethereum NFTs
Recent activity calls into question how dependent NFTs are on the stability of the crypto market
Blockworks Exclusive Art by Axel Rangel
key takeaways
- With lower ETH prices, floor prices of blue-chip NFT collections are going down
- NFT trading volumes have also dropped to their lowest monthly levels
The current cryptocurrency downtrend has prices plunging across the board — and with the value of crypto falling, NFTs in dollar terms have also seen declines over the past few weeks.
Ether, the leader of the NFT market, is trading around $2,000 at the time of publication, down from $2,800 a week ago. Terra’s stablecoin, TerraUSD (UST), and its native token, LUNA, collapsed in recent days, losing more than 99%.
While UST de-pegged from its one-to-one tandem with the US dollar and is trading at $0.13, LUNA hovered around $0.0000914 Friday afternoon.
NFTs built on Terra, meanwhile, marked record levels of trading activity on May 11 that have since declined.
Ether’s lower prices, on the other hand, have caused a lingering drop in ETH NFT floor prices, along with lower gas fees (which power transactions on the Ethereum blockchain).
Blue-chip projects, such as Bored Ape Yacht Club (BAYC) and CryptoPunks, have been no exception. BAYC trading on OpenSea fell to its lowest point in the past month, down 63% on May 12 over a seven-day period.
While the range of daily sales has fluctuated between eight and 67 NFTs on any given day since the beginning of May, the collection’s floor price has taken a more consistent hit.
It dropped to 89 ETH ($169,792) on May 12 and went back up to 99 ETH Friday as markets showed signs of stabilizing. BAYC’s floor price peaked at 152 ETH and nearly crashed the Ethereum network on the eve of the debut of Yuga Labs’ Otherdeed for Otherside collection in early May.
Otherdeed NFTs — required to purchase land in the Otherside metaverse — remain in the top 10 collections with the highest trading volume since its debut on OpenSea. It ranks alongside its parent company’s other collections like BAYC and Mutant Ape Yacht Club in that respect.
Otherdeed for Otherside’s transactions have declined precipitously since launch, from $375 million in volume to $6.5 million, according to NFTGo. Even so, the collection has recorded some of the highest priced NFTs this week, according to NonFungible.com.
Otherdeed for Otherside #59906 sold for 625 ETH, equivalent to $1.6 million.
Other NFT collections that continue to lead the charts this past week include Art Blocks, Doodles and Moonbirds — the Azuki Beanz collection also saw big numbers, even after its founder revealed he was part of three previously failed NFT projects.
Market conditions have also prompted some NFT investors to try to liquidate their holdings amid considerable losses.
In other NFT news, Meta began testing an NFT display feature for a select group of Instagram creators and collectors earlier this week. Once the function becomes publicly available, it could potentially affect the greater NFT market.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
- Empire: Start your morning with the top news and analysis to inform your day in crypto.
- Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
- 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
- Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
- The Drop: For crypto collectors and traders, covering apps, games, memes and more.
- Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
