We have just experienced a “black weekend” for NFTs, where the floor prices of BAYC, MAYC, Azuki, Memeland Captainz and other PFPs fell by 30-60%. Delphi Digital researcher Teng Yan analyzed the reason for this crash: poor expectation management of Azuki Elementals led to panic selling. A large amount of NFTs flowed into the hands of Blur farmers, many of whom have low loyalty and catalyzed subsequent selling.
In short, Azuki Elementals suffered from poor expectation management. Everyone expected something shocking, but what we got was a messy result. The unveiling of Memeland Captainz last Saturday seemed disappointing at first glance, triggering a sudden lack of confidence in the entire NFT community: are NFTs really as worthless/overvalued as everyone says? This led to panic selling.
PFP NFTs are clearly a classic Veblen Good. An NFT that looked good at 15ETH is no longer as good at 5ETH. Demand evaporates as prices fall. A large amount of NFT supply is in the hands of Blur farmers, who have been selling them everywhere to earn Blur points in PvP battles over the past 4 months. They have no incentive to hold onto NFTs, so once selling starts, they only add fuel to the fire.
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Now, the selling pressure has stabilized somewhat. Is this a buying opportunity for a generation or just the calm before the next storm?
Reference: https://twitter.com/0xPrismatic/status/1675831796934807555
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