Crypto Asset Prices Drop, What About NFT?

In 2021, cryptocurrency had experienced an increase and a record high. This can be seen from several crypto assets whose value has soared. Due to its good performance, 2021 is considered the heyday of cryptocurrencies. Unfortunately, this year’s cryptocurrency market is not as sweet as last year’s.

Over the past few months, cryptocurrencies have experienced turbulent times. Two days ago, the cryptocurrency market had fallen to a new low of the year. The cryptocurrency market is down 6.73% in the last 24 hours, based on data at 10 a.m., Monday, June 13, 2022.

Global market capitalization has shrunk below $1 trillion to $977 billion, this is down about 12%. The global cryptocurrency market cap has decreased by around $1 trillion this year. Meanwhile, almost every top crypto asset is now worth half or even less than its all-time high price.

WHAT IS NFT

What Caused Crypto Asset Prices to Drop?

The plunge in crypto asset prices seems to have been triggered by a massive sell-off by investors amid rising inflation fears and a pause in withdrawals by crypto lending service Celsius. In addition, investors also continue to stay away from risky assets, which is also reflected in the stock market.

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Many crypto assets, especially well-known cryptocurrencies, have plummeted in value.Let’s say Bitcoin, as the largest and most popular cryptocurrency. Its value has fallen below $22,000. Meanwhile, almost all altcoins have also experienced a decline in price since the weekend.

Experts say that the decline in the price of cryptocurrencies indicates investors’ declining risk appetite. Investors are starting to be wary of risky assets. With all its uncertainty and volatility, cryptocurrencies are considered to be one of the most volatile instruments for investment purposes.

“The cryptocurrency market has been under pressure from the Federal Reserve, raising interest rates to fight inflation over the past few months. Bitcoin, Ethereum and most cryptocurrencies suffered losses over the weekend following a broad sell-off following data showing US inflation hitting a 40-year high,” said Edul Patel Co-Founder and CEO of Mudrex.

“As investors seem to be panicking, the number of cryptocurrency liquidations has been high since Friday. Bitcoin and Ethereum fell as much as 7% respectively and are currently trading at lows of US$25,000 and US$1,300 respectively. The bearish trend is likely to continue in the coming days,” he added.

Crypto Asset Prices Drop, What About NFT?

Given that cryptocurrencies and NFTs (Non-Fungible Tokens) are two interconnected assets, if many crypto assets go down, then what about NFTs? Based on our search, it seems that NFT has also been affected by the collapse of cryptocurrency prices.

Just like the cryptocurrency market, the NFT market also collapsed along with Bitcoin and Ethereum. The recent massive sell-off in the cryptocurrency market has resulted in the price of some NFTs dropping. Even popular NFT art collections cannot withstand the wrath of a market downturn.

Most of the base prices for many of the most valuable NFT collections have fallen along with Bitcoin and Ethereum. The average entry price for some collections fell more than 17%. Please note, “base price” refers to the cheapest item available on the secondary market. It is often used to measure how popular different NFT collections are.

The base prices of some of the top NFT collections have seen a drastic drop in the market, both in Ethereum (ETH) and US Dollars. The fall in the NFT floor price has occurred over the past week for the top three NFT collections by trading volume. These include Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), and CryptoPunks.

Data from DappRadar on Monday, June 13, 2022, shows the base prices in US Dollars of the three popular NFT collections above fell 31%, 27% and 16%, respectively. At the same time, the average price also fell by the same amount for BAYC and MAYC, while CryptoPunks held on better with an average price drop of only 2%.

NFT Trading Volume Soared Amid Falling Markets and Price Floors

Just like the cryptocurrency market, the NFT market is also facing a major crisis this week. Even so, the NFT market is still a bright spot compared to the cryptocurrency market as a whole. The top NFT projects have seen huge demand this 2022, despite the broader market correction.

Based on the latest data Tuesday, June 14, 2022, 8 of the top 10 NFT projects have seen an 115% increase in 24-hour trading volume. Some of the top NFT projects such as Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Crypto Punks, and Sorare have all seen more than 100% increase in 24-hour trading volume.

There are some top NFTs that are rising sharply amid a falling market and bottoming prices. This includes Goblintown which is up by 35.54% and Moonbirds which is up by 64.11%. BAYC also experienced a 262.79% jump over the past 24 hours and managed to generate $7.1 million in sales.

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This was followed by the three highest-ranking projects such as MAYC, Otherdeed, and CryptoPunks recording 173.49%, 157.88% and 122.69% spikes in 24-hour trading volume. The three NFTs generated sales of $3.4 million, $2.6 million and $2.5 million, respectively.

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