The NFT market is in serious trouble.
While the marketplace for drab JPGs of bored apes and pixelated punks is still alive in 2023, it's arguably on life support, with the appetite for NFTs falling catastrophically as hype for AI has replaced bullish narratives around blockchain and the metaverse.
And that's leaving those still trapped in the industry in dire straits.
"Hearing from multiple NFT collection founders that they want to exit but there’s nobody acquiring these companies," NFT veteran Beanie tweeted this month. "Royalty revenues are non-existent and new mints simply aren’t selling."
That means investors are also losing interest.
"VC funding in the space has evaporated," Beanie wrote. "Young smart builders want to move on but feel trapped."
In short, 2023 has been absolutely brutal to the space so far. According to a recent report by Galaxy Research, VC firms invested $2.3 billion in crypto and blockchain firms in the second quarter of 2023, compared to $8 billion over the same time period last year.
As NFT Now notes, it's the fifth consecutive quarter of decreases in VC investment in crypto firms.
Illustrating the decline, a highly-anticipated anime-themed NFT collection called Ether seriously fumbled its launch earlier this month.
"The public sale has been paused due to no demand," NFT collector MANI tweeted last week. "Only 5 NFTs sold on [OpenSea] in the past 20 min."
At the time of writing, the floor price for the NFTs was 0.42 Ether, or roughly $1,897.30, a far cry from the kind of prices we've seen with previously hyped-up NFT collections.
"Why should you as the retail customer pay $1,200 USD to the ether team for this NFT?" another collector tweeted. "Now that liquidity is tight retail consumers are finally questioning the value proposition new NFT companies are offering."
In other words, Ether was taking a page out of the summer 2022 rulebook, a time full of hot new projects that saw major success by copying those who came before them, as NFT Now explains.
But that kind of approach simply isn't working anymore. After all, apart from being able to claim you're the exclusive owner, NFTs don't really have any inherent value.
So where does the NFT space go from here?
Right now, the market is in a bad state. According to CryptoSlam, global sales volumes are hitting multi-year lows, despite tens of thousands of buyers and sellers still active in the space.
Roham Gharegozlou, the CEO of Dapper Labs, a blockchain games company, announced last week that the company laid off 51 staff, the third round of layoffs in the last 12 months.
The value of Bored Ape NFTs, once seen as prized multi-million-dollar possessions that drew the attention of celebrities over the last couple years, has also plummeted, with the price floor dropping to as little as $52,000 worth of Ethereum this month, Decrypt reported last week.
The simple reality is that mainstream pop culture isn't really talking about NFTs anymore. Whether that's a good or a bad thing is up to you to decide. We, for one, can't wait to never hear about Bored Apes again.
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