NFT collapsed across the board! Blue-chip projects have fallen by more than 30% month-on-month. KOL

NFT KOL wale.swoosh tweeted that the floor price and market value of blue-chip NFTs have fallen sharply in recent times. It is not without reason. He highlighted multiple points, including the high Gas of Ethereum itself and the excessive NFT investment opportunity cost of the current bull market. etc., are all the main difficulties in today’s NFT market.

The problem with NFTs 🧵👇

(1/15) pic.twitter.com/U9ulSel8VR

— wale.moca 🐳 (@waleswoosh) March 11, 2024

Table of contents

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Problems with NFTs
Bull market opportunity cost is high
Airdrops are not an effective solution
High volatility in the crypto market and speculation in the new rather than in the old
High gas fees on the Ethereum network
What’s left with NFTs?
Emotional attachment and community
greater social influence
NFT = meme coin that comes with a picture
Current status of the NFT market: Across the board, blue-chip projects have fallen by more than 30% per month
Problems with NFTs
Yesterday (11), Bitcoin hit a new high again, and the entire crypto market, including Meme coins, fell into a carnival.

However, today seems to be just another ordinary day for the NFT market. As major blue BAYC including Bored Ape Yacht Club (BAYC) fell more than 30% in a week, investors wallet funds are still being lost.

( 4,500 ETH were sold, CryptoPunk hit the second highest transaction price in history, BAYC fell by nearly 20% )

In this regard, Wales raised a number of questions about the current situation of the NFT market, pointing out that only by truly solving most of the problems can the NFT market have the opportunity to flourish again.

Bull market opportunity cost is high
First of all, trading NFT often requires a large amount of capital investment, which will greatly reduce the efficiency of capital use:

Concentrating $10,000 in one NFT prevents you from splitting it and investing it elsewhere.

In addition, the opportunity cost of investing in NFTs during the bull market is quite high compared to the staggering gains of dozens of times that other meme coins can bring.

( Is the meme season the beginning of Fomo? QCP Capital report: Asian speculative retail investors drive this round of rise )

Airdrops are not an effective solution
Then, many NFT projects will use airdrops to regain the attention of their holders. Previously, the veteran project Pudgy Penguins also distributed tokens worth tens of thousands of dollars to some community members.



However, Wales believes that even if the airdrop event can indeed boost the market briefly, the actual and long-term benefits may not be large:

As competition among NFT brands intensifies, holders' requirements for airdrops become higher; and if holders link the value of the NFT to airdrops, they may face sell-offs if future airdrops do not meet expectations. .

High volatility in the crypto market and speculation in the new rather than in the old
With the rise of large-scale NFTs such as ETH and SOL, the dollar value of NFTs has gradually increased; however, in the face of the previously sluggish encryption market , the value of NFTs has generally declined even if the trading volume is low:

The high volatility of cryptocurrencies, as the way NFTs are valued, is often detrimental to the NFTs themselves.

In other words, this requires NFT holders to consider the potential falling cost of the cryptocurrency itself when purchasing NFTs.

At the same time, it is obvious that investors are more inclined to keep up with the latest and hot NFT projects than those veteran projects, and it is therefore difficult for their prices to increase.

High gas fees on the Ethereum network
The most criticized thing is that as the mainstream NFT trading market, once Ethereum's transactions become popular, the high gas fees that will follow will always make investors miserable.



What’s left with NFTs?
However, Wales also emphasized that the NFT market still has its reasons for concern.

Emotional attachment and community
First of all, for art collectors, NFT may arouse their emotional connection and investment, and generate purchasing power based on their love or resonance for specific works or projects.

At the same time, NFT, as a virtual carrier similar to "membership certificates", may also attract people who yearn for specific themes or projects to form and build communities together and make like-minded friends from all over the world.

greater social influence
Finally, the NFT community, as an organization, may also have greater social influence on specific themes, issues, or collective movements, and can use it to participate in charitable activities, promote social reform, or promote creative expression.

NFT = meme coin that comes with a picture
It is worth mentioning that the comment section used an incisive metaphor to describe the current appearance of the NFT market:

The current NFT market is a swimming pool that you can swim in during your leisure time; and what the project team can do is beautify their oasis, plant some coconut trees, paint the floors, and wait for the seasons to change.

He added, "Money always flows to where the market is moving fastest, and people are always catching up with others."

At the same time, some users expressed their dislike of NFT:

For most market participants, NFTs = meme coins with attached images. Few are collectors in the cryptocurrency space and are usually speculators.

Current status of the NFT market: Across the board, blue-chip projects have fallen by more than 30% per month
A glance at the current NFT market shows that, except for the astonishing rise of Milady Maker and the small declines of CryptoPunks and Memelamd Captainz, the rest of the veteran NFT projects have experienced declines of 30% to 51% within 30 days.


NFTGO market data
The chart above shows that the decline is even more obvious when looking at DeGods and CLONE X, which have dropped out of the 20th place in market capitalization.