Cryptoverse: The Bonfire of NFTs

Cryptoverse: The Bonfire of NFTs
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July 5 (Reuters) – The NFT dream is not dead, but it has taken a major non-expendable beating.

The market shone gloriously last year as wealthy cryptocurrency speculators spent billions of dollars on risky assets, boosting prices and profits. Now, six months after 2022, it looks ugly.

Monthly turnover on the largest NFT marketplace, OpenSea, plummeted to $700 million in June, down from $2.6 billion in May and a far cry from January’s peak of nearly $5 billion.

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At the end of June, the average NFT sale sank to $412, from $1,754 at the end of April, according to, which tracks sales on the Ethereum and Ronin blockchains.

“The cryptocurrency bear market has definitely had an impact on the NFT space,” said Gauthier Zuppinger, co-founder of

“We’ve seen so much speculation, so much hype around this type of asset,” he added. “Now we see some kind of decline just because people realize they’re not going to be a millionaire in two days.”

The NFT market has tanked along with cryptocurrencies, which are normally used to pay for assets, at a time when central banks have raised rates to fight inflation and risk appetite has withered.

Bitcoin lost around 57% in the six months of the year, while ether fell 71%.


For critics, the collapse confirms the craze for buying such assets, blockchain-based tradable records linked to digital files such as images or videos, often works of art. read more

The Malaysian businessman who bought an NFT of Jack Dorsey’s first tweet for $2.5 million last year had trouble getting deals of more than a few thousand dollars when he tried to resell it in April. read more

But Benoit Bosc, global product manager at cryptocurrency trading firm GSR, sees the recession as the perfect time to create a corporate collection of NFTs, the cryptocurrency equivalent of the fine art traditional banks put on display to impress customers. customers.

Last month, GSR spent $500,000 on NFTs from what Bosc calls “blue-chip” collections, those with large online fan bases.

His purchases include a Bored Ape Yacht Club NFT, a set of 10,000 cartoon monkeys made by US company Yuga Labs and promoted by Paris Hilton and Jimmy Fallon.

Such is the hype surrounding Bored Apes that Yuga Labs raised $285 million in April by selling tokens that it says can be redeemed for land in a Bored Apes-themed virtual world that it has yet to launch. read more

However, the average selling price of a Bored Ape fell to around $110,000 in June, having halved from its January peak of $238,000, according to market tracker CryptoSlam.

In his New York office, Bosc set up three screens on which to display his NFTs, which include various pixelated characters and a Bored Ape purchased for 125,000.

“For us, it’s also a branding exercise,” Bosc said. Owning a valuable NFT and using it as a profile picture on social media is one way to establish “respectability, authority and influence” in the crypto sphere, he said.


However, the future of NFTs is clearly uncertain as the era of low interest rates that encouraged investors to make risky bets comes to an end.

Some market observers say that the influence of NFTs in the art market will be reduced. Meanwhile, while the much-hyped vision of a blockchain-based metaverse has yet to materialize, enthusiasts hope NFTs will shake up the gaming industry, for example by allowing players to own in-game assets such as avatar skins. . read more

“Everyone thinks gaming is going to be the next big thing in blockchain,” said Modesta Masoit, CFO of blockchain tracker DappRadar.

However, this risky combination of gambling and financial speculation can run into difficulties. Most gamers prefer games that don’t include NFTs or “play to win” components, according to John Egan, CEO of tech research firm L’Atelier.

Although groundbreaking new rules on crypto agreed by the European Union last week mostly excluded NFTs, Spain is separately seeking to clamp down on the way video games sell virtual assets for real money. read more

Meanwhile, the largest NFT-based game, Axie Infinity, has seen its in-game token collapse to less than half a cent, down from a peak of 36 cents last year.

For L’Atelier’s Egan, the NFT market is unlikely to recover in its current form.

“Ultimately, it’s a situation where extraordinary amounts of money are paid for extraordinarily limited assets that don’t actually produce any cash flow,” he said.

But the underlying concept of creating unique digital assets remains “fundamentally important” and will have “massive applications” for the financial sector in the future, he said.

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Information from Elizabeth Howcroft; Edited by Pravin Char

Our standards: The Thomson Reuters Trust Principles.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which, according to the Trust Principles, is committed to integrity, independence and freedom from bias.

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