Last week was one of the worst ever for holders of Bored Ape Yacht Club NFTs, with prices hitting an all-time low since late 2021. An investor in BAYC maker Yuga Labs, the $4 billion startup, blames traders.
BAYC’s floor price – the price of the cheapest item in an NFT collection – fell below 34 ETH ($64,000) for the first time since November 2021, according to data from The Block Research. That coincided with a period of heavy sales.
Some attributed the crash to the actions of rapper and NFT enthusiast Jeffrey Huang, also known as Machi Big Brother, who suddenly unloaded 50 monkeys. Huang has recently drawn the wrath of crypto Twitter is suing blockchain sleuth ZachXBT because of libel.
But Lior Messika, who heads crypto venture firm and Yuga Labs backer Eden Block, sees widespread speculation as the bigger cause of the fall in BAYC prices.
“Today’s NFT market rewards traders and speculators, not builders, who use the underlying IP in creative and valuable ways,” said Messika, whose fund recently hired the former CEO of Goldman Sachs in Israel. He added that NFTs are very risky assets and often “suffer first” in volatile markets.
The impact of Blur on the market
Driving that shift in dynamics is Blur, the Paradigm-backed platform built for professional traders. Since last October, Blur has dominated an otherwise stifled NFT market – today accounts for 66% of volumescompared to OpenSea’s measly 10%, according to data from The Block Research.
“Some will blame Blur and some will blame the lack of royalties, but the situation is simple: A merchant market is re-pricing BAYC’s cultural and utilitarian aspects, and that situation won’t change – not until new capital enters the NFT- enters space (and the BAYC collection) for the right reasons,” said Messika.
He added that where NFT whales were once identified as “gatherers,” they are increasingly labeling themselves as traders or even “Blur farmers” — a reference to the rewards customers can earn in the platform’s token.
“Unfortunately, the market is now dictated by the fear and greed of a few traders, and collectors across the space are struggling to gain a foothold in this new reality,” added Messika.
At its all-time high just over a year ago, BAYC’s bottom price was 128 ETH ($240,000), with individual items selling for millions of dollars. However, Messika thinks Yuga is unlikely to do much in response to the recent price pressure.
“Yuga is building a place for those collections and underlying communities to grow through usability and unique experiences. I believe this approach will lead to the best long-term outcome for their collections as they expand their market. The best thing Yuga can do to respond to negative price movements is to simply send,” he added.
Yuga Labs did not immediately respond to a request for comment.
© 2023 The Block Crypto, Inc. All rights reserved. This article is for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.
