The biggest NFT projects have finally been affected by the bad market attitude, which has led to a complete collapse of the NFT market, raising concerns about why cryptocurrency prices are down today.
Due to the floor pricing of some of the greatest NFTs projects being cut in half, many projects have failed. All due to the recent crypto meltdown, which resulted in some blue-chip NFTs losing their luster.
We have gathered some information on why the NFT market is collapsing quickly while the crypto industry is seeing decreased investor interest.
What Caused the Current NFT Market Crash?
There is a clear relationship between cryptocurrencies and NFTs. Some of the greatest NFT projects have experienced a sharp reduction In the wake of the most recent crypto crisis, the NFT market has also suffered.
their floor pricing over the past 24 hours, along with a nearly 24% drop in cryptocurrency values as a whole.
In the past seven days, the prices of several blue-chip NFTs, including a bored monkey sailing club, have been cut practically in half. As of right now, the floor price is 67.89 ETH, or around $106,347.65. Their Mutant Ape Yacht Club costs have also decreased, from $20,207.46 to 12.9 ETH.
The freshly launched moon bird with a Solana base was likewise punished by the current crypto meltdown. The floor price was 12.5 ETH (19,580.88 USD)
Why Are NFTs Crashing?
Ethan McMahon, an economist at Chainalysis, says that while declining cryptocurrency prices may be somewhat to blame for the collapse in NFT transaction volume, it is not enough to account for the precipitous dip. The abrupt decline in transaction prices was partially caused by an inflated market.
As was already said, the most popular cryptocurrencies and NFTs are closely related. Currently, the entire crypto market is rife with volatility, and it appears that the NFTs are suffering greatly as a result.
Several cryptocurrencies tied to Ethereum are suffering as well as the price of ETH, which has fallen below $1400. Their costs have been cut in half as a result of the volatile market.
Crypto critics are also discussing an odd bathtub effect in addition to those other issues. They characterize this as a procedure wherein the sale of a sizable NFT project has an indirect effect on the costs of other NFT initiatives. Investors are attempting to liquidate these NFT investments in order to raise funds to purchase additional NFTs.
The loss of investor interest in NFTs is a significant factor in the collapse of the NFT market. The phrase "purchase NFTs" has experienced a dramatic decline, with a sharp 80% reduction in recent Google Trends data. Along with it, the interest in the search term "sell NFT" dropped by 83% on Google. All of this indicates that user interest in the NFT domain is declining.
Investor sentiment has been affected by the recent Luna Crypto Crash as well as the USDD and Acala depends. They could have been forced to reduce their total NFT/crypto trading as a result.
NFT Market Restoration
Despite the NFT industry having a lack of investors due to the "crypto winter," according to NFT gaming platform Balthazar, 2022 will noticeably witness a steady NFT market comeback with a growth rate of over 239%.
The worst of the crypto winter has already started to ease, according to John Stefanidis, CEO of Balthazar, as prominent NFTs have started to exhibit indications of recovery. We must still wait and see how NFTs restore their normal speed before making any predictions
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