“Blue chip” NFT series CryptoPunks and Bored Ape Yacht Club (BAYC) both saw reserve prices well below $100,000 worth of ETH this week for the first time in months as the broader NFT market fell to trading figures not seen in years.
Despite the NFT rebound, it currently costs 49.8 ETH ($93,692 at the time of writing) to buy a CryptoPunk, according to data from NFT Price Floor. While still a penny, it’s down more than 30% from a month ago, when the cheapest CryptoPunk on the market could be purchased for just over $128,000 worth of ETH.
The situation is similar for Bored Apes, the celebrity-friendly flagship project of NFT giant Yuga Labs. Aping into the collection currently requires at least 49 ETH, or about $92,200; since November 2021, it no longer takes such a small amount of ETH to buy Bored Ape.
These declining numbers appear to be a symptom of a larger problem: The entire NFT market is seeing fewer and fewer transactions. According to Dune Analytics, daily transaction volume across all NFT markets has plummeted a staggering 71% since mid-April.
This decrease in activity has been gradual and consistent across platforms. NFT transaction records this low haven’t been seen since late 2021 — just under 20,000 on Thursday.
The reason for the recent drop is unclear. Ethereum’s post-Shanghai price gains did slow a bit this week, but the cryptocurrency with the largest NFT market still looks relatively strong, trading around $1,845 at the time of writing, according to data from Coingecko.
One particular factor that is disproportionately responsible for the recent optimistic headlines about the enduring strength of the NFT market is Blur, a relatively new NFT trading platform that quickly surpassed OpenSea to become the top NFT marketplace in late February.
Blur’s rise, though, has been driven by a rewards system that incentivizes traders to abandon other markets and trade as many NFTs as possible, even if they’re going back and forth.
While the NFT market surged to around $2 billion in total monthly trading volume in February and March, that growth was almost entirely driven by volume on Blur, which some industry experts have called manipulated “wash trade.”
Activity on Blur continues to dominate the market, accounting for more than 60% of all NFT trading volume last week. But it is likely that Blur’s strategy of attracting customers from other platforms and encouraging them to make meaningless transactions for financial rewards has begun to suppress real NFT market activity.
Some have pointed out that the recent spike in gas fees could be due to the rise in meme coins such as PEPE last week as a possible cause of the phenomenon. In a Twitter thread on Thursday, analytics firm SeaLaunch pointed to a variety of macro factors that could be at play, ranging from high oil prices to traders facing liquidity issues around the U.S. tax deadline.
Others pointed to these dismal numbers as a sign that the long-awaited “bottom” in the cryptocurrency and NFT bear market has finally arrived. But as last year showed, sometimes it can go even lower.
