<\/p>\n
The NFT space isn\u2019t what it used to be. This has become painfully obvious to those within Web3 over the past few months. From controversial memecoin escapades<\/a> to overwhelming regulatory initiatives<\/a>, the magic of the metaverse has been palpably waning throughout 2023.<\/p>\n As it stands, the current state of the non-fungible ecosystem is a far cry from the market highs<\/a> that helped kick off the year. Yet, this round of \u201cNFTs are crashing\u201d feels different than times past<\/a>. With this bout, the causation behind NFTs slowing down feels more nuanced. Rather than fear, uncertainty, and doubt (FUD) leading the market down, there could be something more at play.<\/p>\n Although community sentiment is difficult to measure quantitatively, market health can usually be gauged by the charts. These looked good at the beginning of the year, with NFT sales up 43 percent<\/a>. This was a welcome change from the bear market that enveloped the majority of 2022. <\/p>\n Yet, in recent months it\u2019s become clear that the success we witnessed in Q1 has not continued. Thus far in 2023, the majority of NFT sales volume<\/a> has been generated on Blur (more on that later). And while volume was up in a big way during the winter, after peaking in February, both volume and trades<\/a> dropped and dwindled throughout the spring. <\/p>\n It initially didn\u2019t seem all bad, though, because, at the start of the sunny season (June), the NFT market witnessed a slight uptick in activity. But upon further inspection, it became clear that this uptick might not necessarily be indicative of a positive trend but rather a variety of issues currently unfolding across a range of prominent blue-check projects.<\/p>\n Most notably, the Bored Ape Yacht Club<\/a> and Azuki<\/a> \u2014 which have each respectively become the center of attention at some point in 2023 \u2014 have been feeling the heat. Although, over the past few months, the majority of NFT sales volume<\/a> has come from these two projects, this latest round of trading seems oddly decoupled from the rest of the NFT ecosystem. <\/p>\n That\u2019s because instead of demand <\/em>fueling trading and resulting in floor prices rising, as we\u2019ve seen time and time again with the launch of secondary collections, current trading seems to be the result of floor prices dropping <\/em>and traders subsequently looking to cash in on a good deal.<\/p>\n While this isn\u2019t uncommon in Web3, especially as Blur continues to dominate the market, it\u2019s odd for such an event to happen to BAYC. As a silo within the NFT space, BAYC (and CryptoPunks, for that matter) has anecdotally existed in a world of its own, unwavering in the face of speculation and regulation. But recently, this has changed.<\/p>\n In the case of BAYC, floor prices have been steadily dropping. At the time of writing, the collection floor sat around 30 ETH<\/a> (about $57,000). Notably, this is the lowest we\u2019ve seen Apes fall since 2021. A similar narrative is playing out with Azuki, with the brand\u2019s core collection<\/a> having hit a floor of just under 7 ETH ($13,000).<\/p>\n Although there are a number of reasons this price action may be happening, many holders and enthusiasts have pointed to dilutions and fragmentation<\/a> as the root cause. More specifically, BAYC holders have felt disenfranchised by Otherside<\/a> and HV-MTL<\/a>, effectively splitting the Yuga NFT ecosystem. Similarly, Azuki enthusiasts were thrown into a tizzy in light of the brand\u2019s recent controversial expansion, Azuki Elementals<\/a>.<\/p>\n Of course, there are still considerations to be made regarding the effect that BAYC and Azuki are having on the market. For one, holders from blue chip collections such as these have actually remained rather steadfast. Yet, while HODLers be HODLing, price is (and historically has been) determined by incremental buyers and sellers. Long story short, if there are no new buyers, there is often a slow bleed downwards.<\/p>\nNFTs by the numbers<\/h2>\n
Bored Apes and Azuki<\/h2>\n