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 massive hit.

The market lit up spectacularly last year as crypto-rich speculators increased prices and profits by spending billions of dollars on risky assets. Now, six months into 2022, it looks ugly.

Monthly sales volume on OpenSea, the largest NFT market, fell from $2.6 billion in May to $700 million in June, a far cry from its January peak of nearly $5 billion.

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

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

“We’ve seen a lot of speculation, a lot of hype around this type of asset,” he added. “Now we’re seeing a kind of decline as people realize they can’t become millionaires in two days.”

The NFT market collapsed, along with cryptocurrencies often used to pay for assets, at a time when central banks were raising rates to combat inflation and risk appetite was waning.

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


For critics, the crash confirms the stupidity of buying such assets, often artifacts of tradable blockchain-based records linked to digital files such as images or videos. Read more

The Malaysian businessman, who bought the NFT of Jack Dorsey’s first tweet for $2.5 million last year, struggled to bid more than a few thousand dollars when he tried to sell it again in April. Read more

But Benoit Bosc, global product manager at crypto trading firm GSR, sees the fall as the perfect time to build an institutional collection of NFTs – the crypto equivalent of fine art by traditional banks to impress customers.

Last month, GSR spent $500,000 on NFTs from collectibles that Bosc calls a “blue chip”—ones that have massive online fan bases.

Among the products it has purchased is an NFT from the Bored Ape Yacht Club, a collection of 10,000 cartoon monkeys made by the US-based company Yuga Labs and promoted by the likes of Paris Hilton and Jimmy Fallon.

Yuga Labs has raised $285 million in April by selling tokens it says can be exchanged for land in a Bored Apes-themed virtual world it has yet to launch. Read more

Still, the average selling price of a Bored Ape has halved since its peak of $238,000 in January, dropping to $110,000 in June, according to market tracker CryptoSlam.

At his office in New York, Bosc put up three screens to display his NFTs, which include various pixelated characters and a Bored Ape purchased for $125,000.

“For us, it’s also a branding effort,” said Bosc. Having a valuable NFT and using it as a profile picture on social media is a way to establish “reputation, authority and influence” in the crypto space, he said.


However, the future of NFTs is clearly uncertain as the era of low interest rates that encouraged investors to take risky bets is over.

Some market watchers say the impact of NFTs on the art market will diminish. Meanwhile, while a far-flung vision for a blockchain-based metaverse has yet to materialize, enthusiasts expect NFTs to shake up the gaming industry, for example by allowing players to own in-game assets such as avatar skins. Read more

“Everyone believes that games will be the next big thing in blockchain,” said Modesta Masoit, head of finance at blockchain tracker DappRadar.

This combination of risky gaming and financial speculation can still come with challenges. According to John Egan, CEO of tech research firm L’Atelier, most gamers prefer games that don’t involve NFTs or “play to win” components.

While the groundbreaking new crypto regulations adopted by the European Union last week mostly exclude NFTs, Spain is also trying to restrict the way video games sell virtual assets for real money. Read more

Meanwhile, the biggest NFT-based game, Axie Infinity, has seen its in-game coin drop to less than half a cent from last year’s peak of 36 cents.

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

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

But he said the concept underlying creating unique digital assets is still “fundamentally important” and will have “major applications” for the financial industry in the future.

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Reporting from Elizabeth Howcroft; Editing by Pravin Char

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The views expressed are those of the author. They do not reflect the views of Reuters News, which is committed to honesty, independence and freedom from bias in accordance with its Trust Principles.

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