NFT Market Collapse: Causes and Predicted Recovery Strategies
The digital art world, known as the Non-Fungible Token (NFT) market, has seen a rollercoaster ride over the past few years. From its humble beginnings in 2017 to the explosive growth at the end of 2021, the NFT market has been a buzzing hub of activity, attracting big names and everyday collectors alike.
The market's strong foundations were laid in 2017 with the popularity of CryptoPunks, Rare Pepes, and other Ethereum collections. The rise of these digital assets marked the beginning of a new era in the art world. Fast forward to 2021, and the market had reached unprecedented heights. Brands like Gucci and D&G launched their collectibles, the first metaverses were launched, and the number of NFT projects increased significantly, with over 1.5 million NFTs traded in a single month.
However, the NFT market has recently experienced a significant downturn, often referred to as a crash. This decline can be attributed to several factors, including market saturation, global inflation, and NFT scams. The collapse of big web3-related systems, like FTX and Terra blockchain's crypto coins TerraUSD and LUNA, has also had a profound impact on the NFT market.
One of the most affected by this crash is Logan Paul, who bought an Azuki NFT for $623k, which is now worth $10. Other high-profile figures like Justin Bieber and Snoop Dogg have also seen significant losses. Bieber's Bored Ape Yacht Club NFT, which was purchased for $1.31M, is now worth a shocking $59,090, while Snoop Dogg lost over $300k with a CryptoPunk bought for $1.1M, now worth about $688k.
Steve Aoki is another celebrity who has felt the brunt of the NFT market crash. His Doodles NFT, purchased for $346,000, is now worth less than $42,000.
Despite the current state of the NFT market, there is hope for recovery and long-term investment. By doing thorough research and understanding the ups and downs of the industry, it is possible to make wise investments and prevent NFT scams. The founders of Yuga Labs, the leaders of the NFT space, have been instrumental in preserving and reviving the market, attracting new collectors with innovative games like Dookey Dash.
The new NFT marketplace Blur has also reported a 120% increase in monthly trading volume, surpassing its competitor OpenSea, and amassed over $100 million in weekly NFT sales shortly after launch. This indicates that despite the crash, there is still significant investment in the NFT market.
In conclusion, the NFT market has experienced a dramatic rise and fall, but it is not a dead end. With careful research, cautious investment, and the continued support of key players, the NFT market may yet see a resurgence in the future.
