NFT prices fall as FTX collapse casts shadow on digital collectibles

NFT prices fall as FTX collapse casts shadow on digital collectibles
NFT prices fall as FTX collapse casts shadow on digital collectibles

The value of non-fungible tokens, or NFTs, is dropping amid renewed questions about the value of cryptocurrencies.

The crypto world suffered a major blow last week when FTX Trading declared bankruptcy amid an $8 billion shortfall. The fallout is now affecting the realm of digital collectibles, says NFT expert Connor Borrego.

The price of ‘The Currency’, a collection of NFTs by famed artist Damien Hirst, fell 12.6% to $4,666.60 on Friday, while Moonbird NFTs fell 4.7% to 8,397.50 $ and Bored Ape Kennel Club fell 8.3% to $4,672.60, according to NFT Price Floor.

The failure of FTX has lowered the price of some cryptocurrencies, reducing the buying power that NFT collectors have enjoyed in the past, Borrego said. Most collectors buy NFTs using cryptocurrency, although many markets also accept traditional payment options like credit cards.

An NFT gives someone proof of ownership of a digital object, or access to services, using a unique code on the blockchain that is linked to an image or video. NFTs can be transferred or sold, but due to their unique codes, they cannot be copied or split into smaller parts like other tokens. Some people buy NFTs in the hope that their value will increase, while others buy them only to brag or participate in an emerging technology trend.

A “Bored Ape Yacht Club” NFT that Justin Bieber bought for $1.3 million in January is now worth $70,000, Insider reported.

Although NFT sales have fallen, the silver lining is “it’s much cheaper to buy the expensive NFTs,” Borrego added.

Expect more control

NFT were all the rage last year as artists, athletes, celebrities and major retailers used emerging technology to sell digital versions of their products. But the collapse of FTX now means crypto firms must scramble to restore customer trust, industry leaders have said.

Account holders were “really impacted financially” by FTX’s collapse, and they will remember how much they lost, Binance CEO Changpeng Zhao said Thursday at a TechCrunch crypto conference in Florida. .

“It’s really going to shake the confidence in the credibility of the trust in this industry,” he said. “So now people are withdrawing funds from centralized exchanges, and the volume [of transactions on an exchange] will decrease. Regulators around the world will be looking at us very carefully going forward.”

The hype around NFTs was starting to wane this year even before FTX went bankrupt, according to recent data. Bored Ape Yacht Club has seen its market capitalization plummet by $2 billion in the past seven months, according to Crypto Presales.

NFT sales fell to $1.6 billion worldwide in the third quarter of this year, down 77% from $7.3 billion in the second quarter, according to industry tracker NFT Nonfungible. The number of active wallets holding NFTs fell 52% over the same period, suggesting clients are deciding to hold their NFTs instead of selling them at a loss, Nonfungible said.

Christopher J. Brooks

Khristopher J. Brooks is a reporter for CBS MoneyWatch and covers business, consumer and financial stories ranging from economic inequality and housing issues to bankruptcies and sports affairs.

. price NFT drop so collapse FTX darkens items collection digital

. NFT prices fall FTX collapse casts shadow digital collectibles

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