Looking back at the one-year anniversary of Terra’s crash, the overall trading volume of the NFT market, the amount of new NFT releases, and the prices of top blue chip NFT projects are all showing a downward trend, and even niche NFTs in the end market have fallen to zero.
An analysis of the reasons for this freeze from shallow to deep:
1. The liquidity of the NFT market was withdrawn;
2. NFT players lack confidence in the future and clear out their positions;
- What are the narratives worth paying attention to in the second half of the year?
- Analysis of the entire process of the Twitter influencer Ben’s “fraud incident”
- Causes, impacts, and solutions to the 2023 US banking crisis
3. FUD caused by the dumping of blue chip NFTs in the NFT lending protocol by whales and the dumping of goods by Blur farmers.
From the data, Terra’s rekt time is not the lowest point of most NFT prices in the market. The low points of most NFT prices are hovering around April 2023 and have a continuous downward trend in terms of trading volume.
Looking at the head of the track, Yuga Labs has launched Dookey Dash, the Bitcoin NFT series TwelveFold, and the otherdeed second test, but has not had a new narrative gameplay to attract more players’ attention and liquidity. The expansion rate of the ecology far exceeds the good news that can be realized.
In addition, the NFT series of the Yuga labs ecology has further expanded and has not performed well in terms of price. The price of koda before it was separated was about 14E, and the floor price of land before the element split was 2E. Now the floor prices of these two series have been halved.
Not only Yuga Labs, but LimitBreak also faces this problem. The diversification of NFT assets in its ecology has dispersed players’ attention and liquidity, resulting in a decline in the prices of NFT series and further undermining HODL’s confidence in the bear market.
In addition, after the FTX incident, NFT holders such as Franklin have been selling their monkeys and other blue-chip NFTs, leading to further anxiety and panic among other NFT holders and a plummeting of confidence in the NFT market.
Backtesting BAYC trading volume over the past year, we noticed a surge in BAYC trading volume in February (02.24), and according to Blockingrsec data, many large holders were fleeing the market.
A potential reason is that Blur’s bid mining reward mechanism provided the market with a lot of liquidity while accelerating the process of NFT market bubble bursting. (Related links)
Blue Chips With The Strongest Rebound
Among the 32 “old blue chips,” only 13 projects saw price increases, with most “blue chips” falling by around 40% to 90%, and the returns from holding blue chip projects far from meeting Alpha’s expected returns. NFT derivatives with good uptrends have mostly seen larger increases, such as Milady and Redacted Remilio Babies, Azuki and BEANZ, Pudgypenguin and Lil penguins.
Of the top 15 NFTs by trading volume, only the holders of CryptoPunks, Milady Maker, Azuki, and Pudgy Penguins have seen positive returns in the past year. (Azuki experienced a community trust crisis in May of last year, with various scandals exposed, and community holders selling NFTs at the lowest price at the time.) The NFTs with real investment value are Milady Maker, Pudgy Penguins, and CryptoPunks.
Of the 27 projects launched in the past year, 15 have seen price increases and 12 have seen downward trends, with OpepenEdition, RedactedRemilioBabies, and Nakamigos seeing increases of more than tenfold. Overall, new, high-volume, and high-yield projects have seen smaller declines than old NFT projects.