Value of digital tokens drops by almost 50 per cent, renewing doubts over hype-fuelled market
By Miles Kruppa, Cristina Criddle and Tim Bradshaw | 10 March 2022
FINANCIAL TIMES — Internet collectibles ranging from cartoon apes to artsy doodles have plunged in value as real-world conflict and a broader cryptocurrency slump begins to unwind one of the past year’s biggest speculative frenzies.
Digital items known as non-fungible tokens burst into mainstream culture last year, as several animal collections including Bored Ape Yacht Club, Cool Cats and Pudgy Penguins spiked in price, aided by celebrity endorsements and social media hype. By the end of 2021, nearly $41bn had been spent on NFTs — making the market almost as valuable as the global art market.
But almost as rapidly, large portions of the market have begun to deteriorate, leaving novice investors with big losses and raising questions about the long term outlook for NFTs.
The average selling price of an NFT has dropped more than 48 per cent since a November peak to around $2,500 over the past two weeks, according to data from the website NonFungible.
Daily trading volumes on OpenSea, the biggest marketplace for NFTs, have plummeted 80 per cent to roughly $50mn in March, just a month after they reached a record peak of $248mn in February. […]