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News/NFT Market Hits Rough Waters: Bored Ape Yacht Club Bears Brunt

NFT Market Hits Rough Waters: Bored Ape Yacht Club Bears Brunt

Jul 5 2023

11 months ago3 minutes read

Unmasking the NFT Decline: The Case of BAYC Prices

Written by Van

The shockwave reverberating through the NFT market lands directly at the doorstep of Bored Ape Yacht Club (BAYC) aficionados. Amid the gaming industry's buzzing innovations, the BAYC NFTs door price drastically dipped, recording an alarming low that the market has not seen in two years.

Triggered by an overall turbulence shaking the NFT market, this plummet witnesses a drastic 16% downfall.


The Rippled Effect Across the Ethereal OpenSea

Perspectives broaden when one peers at the bigger picture, particularly the pervasive ebb in the NFT market arena. The effect ripples to the authentic corners of OpenSea, a hub esteemed for Ethereum and Polygon NFT dealings.

The formerly rosy sales scene now mirrors a stark contrast as the numbers plunge to record depths.

Other players in the NFT gallery, including Mutant Ape Yacht Club (MAYC), bear the brunt of this shared ordeal, navigating significant dents in their price shields. The market scale's tipping under these adversities resonates across all tiers, signaling a cautionary tale for the NFT domain.


Fading Star: The Justin Bieber NFT Debacle

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The volatile NFT market does not discriminate, ensnaring even globally-renowned pop sensation Justin Bieber in its tumultuous web. A whopping 95% downfall translates into a daunting $1.2 million in losses for the star, underscoring the risky precipice that NFT investments stand on.

Bieber's ordeal sheds significant light on the instability of the NFT market, a sporadic cautionary storm intertwining with occasional sunlit success.


NFT Landscape Shaken: Blue-Chip Liquidations

Scrambling to sustain amid the churning tide of panic, the NFT market witnessed over 1,200 liquidations. This frenzied exodus dealt a particularly stunning blow to the reputation of highly-valued, blue-chip NFTs.

Once paraded as the market's glittering crown jewels, they now tread sinking sands as market participants scamper for safety exits, revealing the market's vulnerable underbelly.


Crypto VC's New Focal Point: The Infrastructure Bet

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paradigmatic shift in crypto venture capital allocation is a defining moment amid the current market turmoil. The exuberant interest in the NFT/Gaming sector, once a sparkling beacon that magnetised investor attention, appears to be fizzing out.

Instead, reports from June paint an inverse image - Infrastructure outshining the former industry favourite to claim the top spot, corroborating that jittery market conditions are nudging investors towards essential pillars of the crypto domain, namely foundational companies and projects.


Spotlight on Azuki: Ripple Effect on NFT Sector 

Azuki's narrative is revealing, a case indicative of the current climate plaguing the NFT sector. A steep nosedive in Azuki’s floor price - a precipitous fall from 16.5 ETH to a mere 5.5 ETH, brings to the forefront worrying concerns of a creeping bear market.

This 67% fall is echoed in other leading NFT ventures such as Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC).

Amidst the turmoil, the base prices of these forerunners felt a tight squeeze; BAYC watched its price slide below 30 ETH, witnessing a 23% drop in merely a week. The plight of MAYC was marginally steeper, recoiling under a 30% fall in the same period.

The tremors reverberated further, destabilising NFT lending platforms. Reflecting this turbulence, Paraspace’s Total Locked Value (TVL) fell 11% within a day, BendDAO’s by 53%, and Blur lending’s by 26.7%. These alarming statistics mark the ripple effects of the Azuki case, an emblematic episode of NFT market unsettling.


The NFT Crossroads: A Glimpse into the Future

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The NFT market stands at a complex juncture, a crossroads humming with untapped potential. Despite tumbling base prices, recent days have observed an upsurge in trading volume across various NFT platforms. This new dynamism, signalling intense activity and considerable churn, hints at an undercurrent of hope amidst uncertainty.

Market turbulence uncovers untapped opportunities, marked by the emerging prominence of NFT derivatives such as lending platforms, indexes, perpetual contracts, and innovative offerings that have seized investor attention.

This complex forecast predicts a fair share of challenges, but once the dust of the Azuki incident and similar events settles, a trail of recovery and an upswing in growth may finally break the horizon.


Blur's Justification: Floor Prices in Flux Amid Crypto Bear Market 

Blur has come under fire for its token incentive system, with critics claiming it encourages whales to accumulate Blur tokens, driving down NFT floor prices. Founder Tieshun "Pacman" Roquerre counters these claims by underscoring the fluctuation of floor prices since Blur's inception and the importance of liquidity injections in price elevation. 

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Source: Tieshun "Pacman" Roquerre/ Twitter

The recent $40 million Azuki event is cited as an example of market liquidity drainage that led to a decrease in floor prices. The current bear market, emphasized by an over 80% decline in the value of several collections like the Bored Ape Yacht Club by Yuga Labs, is causing unrest among NFT investors. 

Roquerre, however, stands firm in his defense of Blur's token incentive system amid these critiques. He places the blame on the bear market situation and liquidity changes.


Ethereum NFT Royalties Navigating Two-Year Lows

April 2022 threw the spotlight on the all-time high NFT royalties, raking in a weekly average of an impressive $75.7 million. Nansen's figures reveal that Yuga Labs, architect of BAYC, bagged $165.5 million in royalties from its suite of NFT collections. 

Competing NFT creators such as RTFKT and Azuki have garnered substantial royalties from their collections — around $79.9 million and $58.2 million, respectively. Meanwhile, the studio behind Moonbirds, Proof, hauled in $35 million in revenues, and Doodles has amassed $27.4 million with its unique ensemble of collections.

Today, NFT enterprises are experiencing their lowest royalties in two years, according to a Nansen report, shadowing a sharp drop in Bored Ape Yacht Club NFTs' floor prices. 

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Source: Nansen

The role of distributing royalty payouts to NFT projects was primarily held by OpenSea until Blur, a competitor, introduced a policy that compelled a minimum royalty of 0.5%. Nansen’s data shows that both OpenSea and Blur are now nearly equal in the royalties dispatched through their platforms.

The top 10 NFT collections have so far earned over $345 million in royalties, with $150 million coming from Yuga Labs alone. Only 20 NFT projects have accrued more than $10 million in royalties.

However, with decreasing Bored Ape Yacht Club floor prices and a general bear market downturn, vigilance is advised.


Frequently Asked Questions

1. What prompted the drop in Bored Ape Yacht Club NFT prices?

The significant drop in the Bored Ape Yacht Club (BAYC) floor prices aligned with an overall NFT market downturn. Factors included a new game launch surge and the volatile nature of the NFT market.

2. How has the broader NFT market reacted?

As shaken by the downtrend, Ethereum and Polygon NFTs sales on OpenSea plummeted significantly, hitting their lowest mark ever. Other NFTs such as the Mutant Ape Yacht Club equally grappled with diminished prices.

3. How have blue-chip NFTs been affected?

The market turbulence led to over 1,200 liquidations, drastically impacting blue-chip NFTs. The market participants' scramble to exit the situation muddied the standing of these previously esteemed NFTs.

4. How has the Azuki episode influenced the NFT sector?

Azuki’s drastic price fall from 16.5 ETH to 5.5 ETH unsettled the NFT market. It mirrored a broader trend involving a plunge in the base prices of leading NFT projects, including Bored Ape Yacht Club and Mutant Ape Yacht Club.

5. What is the future outlook for the NFT market?

Despite the tumult, the NFT market is far from lost. An upsurge in trading volume points to high market activity. The introduction of NFT derivatives and innovative products offers a glimmer of hope, suggesting potential recovery and growth beyond the current downward trend. While market corrections can be unsettling, they also present opportunities for future resilience and innovation in the NFT ecosystem.


A Closing Thought

The recent downfall should be read as a market correction rather than a full-blown collapse of the ecosystem. The roller-coaster ride of NFT trading is far from over. As investors and enthusiasts decipher the rough terrains of the market, the brush with adversity can embolden the pursuit of hidden opportunities.

The NFT market saga continues, interwoven with immersive curiosity, healthy caution, and an undying resilience, leading to uncharted territories of potential upswing.

This article has been refined and enhanced by ChatGPT.

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