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Why BAYC Has Been One of NFT Collections Most Affected by the FTX Crash

Cryptocurrency Nov 14, 2022 10:30AM ET
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Why BAYC Has Been One of NFT Collections Most Affected by the FTX Crash
 
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  • The prices of Bored Ape Yacht Club NFTs are falling due to the collapse of the FTX exchange.
  • Sellers are taking low-value offers in order to quickly liquidate their NFTs

The sudden liquidity crunch faced by FTX, as well as its alleged mismanagement of customer funds, have resulted in a slump in the value of broad strokes of the crypto market—and the NFT sector has been no different.

Amidst these struggles, the value of NFTs in the ‘Bored Ape Yacht Club’ (BAYC) collection has been steadily decreasing in value as the price of Ether (ETH) tumbles, leading to holders panic-selling their NFTs.

CryptoPunks Collection Flips BAYC

Based on data of the NFT price floor, the cheapest available BAYC NFT on the market is currently listed for 54.54 ETH at the time of writing.

Source: NFT Price floor

Metrics from CryptoSlam, an NFT collectibles data aggregator of numerous blockchains, including Ethereum, WAX, and FLOW, also indicates a decrease in sales.

In October of 2022, the NFT industry recorded a trade volume of $31,275,729.82, while so far in November it stands at $23,330,998.78.

Source: CryptoSlam

Why BAYC Is Crashing in Value

There are numerous factors as to why BAYC prices are eing pushed down, with the general crypto market crash that has followed in the wake of FTX’s collapse primary among them.

Data from Flipside Crypto, as shared by Proof Director of Research “Punk9059”, indicates that there has been notable increase in trade activity on leading NFT marketplace OpenSea. Furthermore, traders have been using Wrapped Ethereum (WETH) in place of standard Ether (ETH), as WETH trades surged to use in more than 50% of executed transactions.

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Placing a bid to an NFT on OpenSea requires WETH, so when this number increases, it gives us the perspective that more NFT owners are accepting bids placed on their assets.

BendDAO also had a role in this protocol, letting users take out crypto loans using valuable NFTs as collateral.

BandDAO auctioned 19 BAYC NFTs from liquidated loans, out of which five remain as of November 14, 2022.

Source: BendDAO

Some crypto enthusiasts have even speculated that the decline experienced by BAYC is due to the illiquid ApeCoin (APE), a major cryptocurrency in the BAYC ecosystem. The token suffered greatly due to a substantial amount of APE tokens being held on the FTX exchange.

On the Flipside

  • The NFT space is now more active than before, as a high volume of NFTs move from one cryptocurrency wallet to another, indicating that genuine interest still remains in the nascent digital art space.
  • ‘CryptoPunks’ still trails BAYC in terms of all-time NFT sales, according to data from CryptoSlam.

Why You Should Care

Bored Ape Yacht Club (BAYC) NFTs originally saw a surge in popularity and use among celebrities, resulting in the collection ballooning in price, especially compared to CryptoPunks. However, in the aftermath of the FTX debacle, the premier collection has become more accessible.

While the sector’s declining value has hit a lot of investors hard, it has made room for NFTs to regain the spotlight, and will likely contribute towards an increase in the popularity and overall sales of NFTs.

Learn about OpenSea’s NFT royalties enforcement policy:

OpenSea Launches Tool to Enforce NFT Royalties for New Collections

Visa (NYSE:V) and Crypto.com have collaborated for a new sports NFT range. Find our more:

Visa and Crypto.com Launch NFTs for Soccer Fans Ahead of the FIFA World Cup 2022

See original on DailyCoin

Why BAYC Has Been One of NFT Collections Most Affected by the FTX Crash
 

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