It seems that the NFT craze has completely died down. While many people believe that cryptocurrencies in general are wildly overvalued, the number of those who saw the rise of NFTs and were baffled by their proposed utility was even higher. Among crypto enthusiasts, the percentage of those who strongly believed in NFTs and their ability to create a strong market was quite low.
The whole concept seemed unnecessary and prone to spawn a multitude of fraudulent projects. While there is an undeniable utility in having non-fungible tokens, their application has not yet produced any meaningful examples of how NFTs are better compared to solutions that do not involve any blockchain elements whatsoever.
On the other hand, theft, deception, and pump-and-dump schemes ran rampant creating a very unstable environment where predictable trading was close to impossible. Finding any tangible value in NFTs was a very tall task that many investors found uninteresting leaving only speculators and gullible people to continue funding scammers looking to drop their next hot NFT collection on a crowd of readily available buyers who believed that their links to monkey pics will become next Mona Lisas.
Well, the collective delusion is slowly disappearing as most investors pull out of the market and the continuous slow descent of the crypto market continues with ETH losing a substantial portion of its value over the last quarter. The drop in fiat value forced many organizations to rethink how they operate completely. For example, BendDAO has lowered its collateralization threshold to 70% from 95% meaning that they can start selling NFTs earlier to offset some of the losses incurred by the falling price of ETH.
The move was made too late. OpenSea had its worst day since its peak in May. On August 28, the NFT marketplace saw a daily volume number 99% lower than the peak in May. We had a total of $5 million in sales. The floor price for many NFT collections dropped by 53% (BAYC) and 20% (CryptoPunks). Some previously hotly debated tokens are not seeing any market activity. The bubble is bursting.
