The Great NFT Price Plunge: What’s Happening and What’s Next?
NFTs and Metaverse Less Popular
Recent months have seen a significant drop in the prices of some of the most popular NFT collections of 2022, including Blue-Chip collections that were supposed to be a reliable investment. Some collections, including Doodles, Invisible Friends, Moonbirds in Goblintown, have lost up to 95% of their value in Ethereum (ETH). This means that the average NFT collector has lost several thousand euros, and the average value of blue-chip NFT collections is also down by 40%.
Metaverse projects, where virtual land can be purchased as an NFT, have also experienced similar problems. A recent study by Coingecko has shown that the average value of a piece of virtual land has fallen by around 90%. For instance, a piece of land in the most expensive Metaverse project Otherside, which had cost 7.50 ETH (€13,000) last year, now sells for only 1.09 ETH (€1,900).
What’s Causing the Price Plunge?
The main reason behind this price crash is the saturation of the market: too many NFTs are available, and too many collections are similar to each other. This has led to a loss of interest among collectors, who now prefer to avoid investing in NFTs.
Moreover, with the market being largely unregulated, there are also concerns about scams and fraudulent schemes, making it difficult for buyers to identify the genuinely valuable NFTs.
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NFT Investors Hope for a Comeback
Despite the drastic plunge in prices, investors remain hopeful for a comeback, as they continue to purchase NFTs en masse. In fact, the number of holders of blue-chip NFTs has increased by more than 90% over the last few months, indicating that there is still interest in the market.
However, there is also an increase in the number of NFT sellers. The number of sellers increased by 32%, while the number of buyers decreased by 30%, leading to a sales surplus. This makes it difficult to speculate on the future price of NFTs, but some investors remain optimistic that with time, prices will stabilize and even increase.
Peter Schiff Launches his Own NFT Collection
Against all odds, even crypto-skeptic and legendary stock market investor Peter Schiff has launched his own NFT collection in collaboration with Market Price. The collection features one real painting, “Golden Triumph,” with 50 versions of it as NFTs. The auction is expected to start on June 2, 2023, on the Bitcoin blockchain.
The current NFT price plunge highlights the need for regulation, as the unregulated market has led to a saturation of similar collections and concerns about scams. However, with the increase in the number of blue-chip NFT holders, there is still interest in the market, and some investors remain hopeful of a comeback. Only time will tell whether NFT prices will stabilize or continue to fall, but one thing is for sure: the NFT market is still an exciting space for artists and collectors alike.