Nothing like spending house money on a picture.
NFT Bros recieve enough flak as is, so I will try to keep it to a minimum. As everyone watches the market crash, it seems many people aren’t mentioning the implosion going on within the NFT market. Obviously, part of this has to do with the price of Ethereum continually crashing as much as 90% over the past year and about a 50% crash in the past few months. However, NFTs are taking a hit upon already taking a massive hit from ETH. Obviously, NFTs have been constantly in the headlines in recent times due to the massive craze for them. From ‘Metaverse’ property to pictures of the poorly drawn monkeys you see above, not only is there billions pouring into NFTs, but the prices have become absurd. Like all ‘gold rushes,’ they eventually come crashing back to earth.
Unfortunately for anyone that bought in early May, you’re likely down as much as 80% based on the floor price of the infamous Bored Ape Yacht Club (BAYC). A floor price is generally what the lowest price of an NFT in a collection is going for. If lots of people are buying the NFT collection, most will begin buying the cheapest ones because, with the exception of special numbers (#1, #69, #420) or those with limited features, they’re pretty much all the same. It’s generally a good way to measure how much a collection is worth because if people are buying them, that’s the minimum amount you can sell it for. Similarly, if the floor price is dropping fast, that means people are lowering their prices to capture a fire sale.
On May 1, BAYC hit a floor price high of $420,430 per NFT.
and since then, it’s been all downhill from there, literally. On May 1st, 2 NFTs would nearly make you a millionaire. Just over a month later, NFTs are selling for lows of $89,998.
This represents losses of 79%! While this specific price plummet has been quite a bit more severe than the rest of the crypto and stock markets, YoY, it’s roughly in line with the rest of the market. If you bought a year ago, you would likely be hitting similar levels or losing money depending on when you bought and how much.
Some of this crash can likely be attributed to the current price of ETH having crashed, but it seems NFTs are definitely crashing more severely. On May 1, ETH was worth about $2700, but it has since crashed to $1100. This represents a decline of about 60%, so NFTs are definitely getting hit harder than the overall market. The overall market has also given up most of its YoY gains, but it is still only down about 25%-30% from its all-time highs.
I mean, I could never imagine spending half a million dollars for a link to a monkey picture .png, so these people are doing better than I am, I guess. I have also never lost $300,000 in 6 weeks, and I’ve also seen instances of people mortgaging their house and using their life's savings to buy monkey pictures, so there’s plenty of room for improvement all around.