The nonfungible-token market witnessed a dramatic selloff over the last week, as prices of major collections tumbled amid growing investor doubts over just on how valuable NFTs should be.
(Bloomberg) — The nonfungible-token market witnessed a dramatic selloff over the last week, as prices of major collections tumbled amid growing investor doubts over just on how valuable NFTs should be.
Data from crypto data platform Parsec shows that the floor price of Azuki has dropped by more than 60% in the past week, while that of other well-known NFT collections like Bored Ape Yacht Club, Mutant Ape Yacht Club and Pudgy Penguins dropped in a range of 14% to 31%.
The slide followed the unveiling of a new collection from the popular NFT project Azuki last week. Chiru Labs, the company behind the Azuki project, launched Azuki Elementals, prompting an unexpected backlash from its community, which noted the striking similarity between the new NFTs and an Azuki collection released last year. The new Azuki Elementals NFT collection raised $38 million, or 20,000 Ether, during the initial sale.
The Azuki Elementals launch “raised many questions: Why do they look like OG Azukis? Was this a cash grab?,” said Yau Teng Yan, head of NFT research at digital-asset research firm Delphi Digital, in a tweet. “What do you actually get by owning an OG NFT, that justifies their prices?”
Azuki, recognized as one of the top NFT collections in the market, is widely accepted as collateral in the growing NFT lending sector. This recent fiasco has resulted in a wave of collectors unloading their Azuki, creating a ripple effect across the lending market.
Data from Dune Analytics, compiled by user @metastreet, indicates that the daily volume of loans defaulted across major NFT lending platforms, including NFT.Fi and Blur, hit a record high in the wake of the market selloff.
“NFTs that looked good at 15 ETH no longer look as good anymore when they are at 5 ETH,” Delphi Digital’s Yau said. “Demand evaporated as prices fell.”
The digital-asset market, meanwhile, has remained relatively unaffected by the NFT drama. Bitcoin hovered around the closely watched $30,000 level Monday morning New York time.
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