On the web, owners and analysts express themselves on the vertiginous fall in the price of Azuki NFTs. The market is certainly experiencing a spectacular slowdown, and the bear market has certainly had something to do with it. However, other factors also come into play.
Fall in the price of NFTs: the case of the Azuki collection
In May, the price of NFTs from the Azuki collection fell sharply after a suspected rug pull from its creator, Zagabond. In the DeFi ecosystem, a rug pull occurs when a developer abandons a project and disappears with an investor’s money. Zagabond has indeed revealed that it has abandoned several projects in the past. The price of NFT Azuki literally crashed following this confession. At the same time, the market is being hit hard by the bear market. It registers a 92% drop from September 2021 to July 2022, according to data from Chainalysis (an American blockchain analysis company).
In this slowing market, one of the famous holders of NFT Azuki spoke on social networks about the situation. This is the American influencer Logan Paul, owner of “Bumblebee” (and many other NFTs). He tweets: “A year ago, I spent $623,000 on an NFT. Today, it is worth practically nothing”. It was in July. More recently, an observer known as Wall Street Silver reveals more details: “Logan Paul paid $623,000 for this NFT which is now worth $10. Draw your own conclusions ».
Understanding the NFT Market Collapse
Before the price of Azuki NFTs dropped, this collection was among the best-selling in the world. And its success was rapid. On the morning of January 12, 2022, four men in their thirties launch 8,700 NFTs, the Azuki Collection. This is a collection of hand-drawn digital avatars inspired by the Manga universe. Each work costs $3,400. All NFTs sold out in just three minutes. Within a month, Azuki achieved nearly $300 million in trading volume across several major NFT marketplaces, and NFTs in this collection continued to rise in value, as rug pull admitted.
Beyond this case, Azuki NFTs are suffering from the general market slowdown. This decline is partly explained by the bear market, but not only. There is also the volatility of cryptographic assets, but also, and above all, cyberattacks. Over $100 million worth of NFTs have been stolen in the past year. These are the findings of a study conducted by elliptical (a London-based blockchain analytics provider) in August 2022. Investors are wary of an asset class associated with such high levels of theft. Furthermore, the NFT market is driven by exuberance, impulse buying and hype. He quickly got exhausted.
Faced with this extreme decline, some experts like George Monaghan at GlobalData believe that the NFT market is dead. At least for a time. Others believe that the collapse of the NFT market could lead to a revaluation of the real value of the tokens. This will change the way they are used. For still others, it’s just a cycle economic, as in real estate. Seen in this light, Azuki and others will certainly recover.
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