In recent days we have seen a very low volume of NFTs trades, mainly on the Ethereum network. While there is some movement in 2nd layer networks, it is notable that the market for digital collectibles is at a turning point.
Something is up, and many people are scared of what it could be.
In a volatile market like that of crypto assets, quick and accentuated changes like the one we saw are very common that need.
But what we saw was a chain of events that caused the value of NFTs to collapse. This is not a common phenomenon and can mean many things. Let's remember how things happened.
The first important event that had important consequences for what we are currently experiencing was the beginning of a Bear Market in 2022. At the beginning of the year, the NFT market was moving volumes astronomical and made investors excited about the future.
👇 But a few months later things started to gradually get worse.
With a strong contraction of the crypto assets market, one would expect the NFTs to take a hit. And so it was.
Mints started to have lower prices and stopped being so competitive. In the following months, we saw a free-mint meta, which gave the market a good boost. But it took a little while for projects like that to stop attracting the attention of investors.
Even with the decrease in trading volume, NFTs are still kept safe from the great variations that took place in the cryptocurrency market and accumulated a large part of all the volume traded in crypto assets.
This made users, especially traders, look for alternatives to increase the profitability of their investments.
We quickly saw the NFT market adapt to bring elements from the conventional market of crypto assets, with a change in investor mentality. What mattered then was to focus on more profitable and cheaper transactions, and not invest in the medium or long term in collections with solid fundamentals.
In this context, OpenSea is no longer the more profitable option for investors, who started directing their transactions to other marketplaces that did not guarantee royalties for collections, such as Blur.
With that, a war began that greatly harmed NFT collections, as OpenSea made the payment of royalties optional.
The next step was the counterattack from Blur, which offered a very competitive airdrop for investors. This led to excess arbitrage and a large volume of transactions specifically targeting the rewards farm on the platform, which led to a depreciation of the entire NFT market.
All this made investors look for more promising alternatives. And as expected, this demand was answered quickly, with the arrival of an overwhelming wave of shitcoins.
Captained by the memecoin $PEPE, Baseless Coins captured a large chunk of the NFT market volume.
Soon enough, the negotiations with NFTs are no longer interesting for BOT operators who at other times billed fortunes every day. There was a decrease widespread in the number of NFTs listed and a great stagnation befell all collections.
With no royalties and big doubts about the future, investors and founders found themselves in the most challenging time for NFTs yet.
The good thing about accompanying the development of such a new and disruptive ecosystem is to always be stimulated by the constant changes it is experiencing.
When NFTs became the center of attention and concentrated insane volume, something bad happened too. We've seen the essence of a community and a collection succumb to speculation.
Everything that has value has a market. And NFTs were not without significance. On the contrary, they may be becoming even more valuable, thanks to their maturing collector base.
In the next bull cycle, it will be more challenging to attract the attention of experienced investors, who no longer believe in promises of utility and exponential returns with no financial basis.
Everyone likes to earn money. This is one of the main reasons why people invest in cryptocurrencies. But that's not all it's about and we know that.
Web3 is an unstoppable phenomenon. communities came for a stay and the sense of digital identity depends to a large extent on the JPEGs that we use like PFPs.
We are rapidly moving towards the next Bitcoin halving. In recent months we have seen major threats being faced without causing much damage and the market holding on with great determination and consistency.
Sooner or later another bull cycle will hit the crypto market. And eventually, NFTs will once again be the center of the world. When that happens, we'll be ready.