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NFT sales stagnate – WSJ

The NFT market is collapsing.

The sale of non-fungible tokens, or NFTs, has fallen to a daily average of around 19,000 this week, down 92% from a peak of around 225,000 in September, according to data website NonFungible.

The number of active wallets in the NFT market fell 88% to around 14,000 last week, from a high of 119,000 in November. NFTs are bitcoin-like digital tokens that act like a certificate of ownership that lives on a blockchain.

Rising interest rates have crushed risky bets in financial markets – and NFTs are among the most speculative.

Since hitting highs in November, the tech-heavy Nasdaq Composite has fallen 23% and bitcoin 43%. The Federal Reserve is expected to raise rates this week and next month. As the central bank’s easy money policies come to an end, investors have turned to more defensive stocks like consumer staples.

Many NFT owners find that their investments are worth significantly less than when they purchased them.

An NFT of Twitter Inc’s first tweet.

co-founder Jack Dorsey sold in March 2021 for $2.9 million to Sina Estavi, the chief executive of Malaysia-based blockchain firm Bridge Oracle.

Earlier this year, Mr. Estavi put the NFT up for auction. He received no offers over $14,000, which he did not accept.

Mr Estavi said the failure of the auction was not a sign of market deterioration, but simply a normal fluctuation that can occur in any market. The NFT market is a market that is still developing, he said, and it is impossible to predict what it will look like in a few years.

“I will never regret buying it because this NFT is my capital,” he said.

Another NFT buyer purchased an NFT hosted by Snoop Dog, titled “Doggy #4292,” in early April for around $32,000 worth of cryptocurrency ether. The NFT, an image of a green-skinned astronaut standing on what looks like a Hollywood Walk of Fame star, is now up for auction, with an asking price of $25.5 million. The current highest bid is 0.0743 ether, or around $210.

Non-Fungible Token Sales Volume by Category, Daily

Avatars, animals and other digital assets

In-game items such as gear or weapons

Work carried out manually or by computer

Props, real estate and other items used in

virtual worlds

Avatars, animals and other digital assets

In-game items such as gear or weapons

Work carried out manually or by computer

Props, real estate and other items used in

virtual worlds

Avatars, animals and others

digital assets

Game items such as equipment

or weapons

Work carried out manually or by computer

Accessories, real estate and other items

used in virtual worlds

Avatars, animals and

other digital assets

game elements such as

equipment or weapons

Work done manually or

computerized

Accessories, real estate

and other items used in

virtual worlds

Avatars, animals and

other digital assets

game elements such as

equipment or weapons

Manual work

or computer

Accessories, real estate

and other items used in

virtual worlds

This lack of interest is not unique. Interest in NFTs as measured by the number of searches for the term peaked in January, according to Google Trends, and has fallen about 80% since then.

The imbalance between supply and demand is also hurting the NFT market. There are about five NFTs for every buyer, according to data from analytics firm Chainalysis. At the end of April, 9.2 million NFTs were sold, which were bought by 1.8 million people, the company said.

The largest US crypto exchange still bets on NFTs. Coinbase launched a beta site last month and four million people signed up. It will allow users to connect existing wallets to the site and buy and sell NFTs, initially without trading fees, and create NFTs through the site.

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The profile of NFTs as part of the zeitgeist has surged in 2021 as musicians, artists, celebrities and businesses jump on the bandwagon. The artist Beeple has sold an NFT linked to his work for $69 million. Adidas AG and Nike Inc..

minted and sold NFTs attached to their sneakers. McDonald’s Corporation.

sold an NFT related to the reissue of its McRib sandwich.

There are signs that collectors can also tell the difference between NFTs that catalog a huge set of cartoon-like characters — like CryptoPunks — and bespoke NFT art projects spurred on by big-name artists who already enjoy museums.

Among these artists dubbing on NFT art is New York artist Jeff Koons. The artist known for his oversized balloon animal sculptures is selling a series of NFTs attached to an actual sculpture he intends to launch to the moon later this year. His gallery, Pace, said his moon-shaped sculptures attached to his NFTs were selling quickly as a package at $2 million a piece.

The rise of play-to-earn video games – in which players trade NFTs – offers a glimpse of how the metaverse could entice users with monetary rewards, and the pushbacks that could come with it. Photo illustration: Josephine Chu

Earlier this month, NFT art platform TRLab said it only took Chinese artist Cai Guo Qiang, who is internationally known for his works using gunpowder, a minute. to sell its series of 7,000 NFTs that allow shoppers to help create their own digital fireworks. .

Zach Friedman, co-founder and COO of crypto brokerage firm Secure Digital Markets, explains that what makes NFTs stand out now is a benefit or utility attached to them.

Director Kevin Smith plans to sell 5,555 NFTs tied to an upcoming movie, “Killroy Was Here.” Only people with the NFTs will have access to the film.

A band called The Crystal Method is auctioning off NFTs tied to a new song that include backstage passes to a concert and dinner with the band.

“Those that continue will definitely be utility-driven,” Friedman said.

—Kelly Crow contributed to this article.

Write to Paul Vigna at [email protected]

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