GM DOers! 😎
Are NFTs back? Here are a few recent happenings that might make you think they are:
1⃣ Simpsons released an episode all about NFTs which begins with Homer minting Bart as an NFT.
2⃣ Joe Rogan and Elon Musk discussed the good and the bad of NFTs.
3⃣ Mark Cuban made a very bullish video that went viral where he basically compared NFTs right now to Amazon stock when it was $5.
4⃣ Yuga Labs & BAYC founder, Wylie Aronow aka GordonGoner.eth, purchased a CryptoPunk for over $1.1 million.
2h later he spent 600 ETH on this punk.
That’s $1.1 million
1
The NFT crowd went mad.
To add fuel to the fire, we can see that the total NFT market cap has gone up from ~2.8 million $ETH to current prices of 3.2 million $ETH.
For context, that’s a whopping $752,016,000 surge in total NFT market cap, up to $5.9 billion.
So, there’s a lot of bullishness happening with NFTs as of late.
The awareness that these big celebs have brought upon the NFT space, paired with some positive price action has excited a lot of crypto & NFT enthusiasts.
But does this mean we’re back? Will we head to higher highs in the near future? Should you FOMO back into NFTs?
TL;DR — Not quite! It looks like the current narrative is driven by a few big events, and frankly, it doesn’t seem sustainable.
But let’s look onchain to learn more. ⏬
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NFT Onchain Stats 👀🔛⛓
Here’s what gets everyone in the NFT space excited. NFTs have gone up in volume for the last 4 weeks straight.
That last bar represents this week (yet to end), which is why it’s so small.
However, if we look closer, we can see that Blur is responsible for all of that NFT volume.
Here’s the chart excluding all other marketplaces.
Looks identical, ey? That’s because Blur has settled more trading in the past month than all other marketplaces combined.
But why is that? Because of the upcoming Season 2 for Blur, aka the next airdrop that’ll be distributed to NFT traders who’ve used the platform.
With this in mind, we can assume that much of the NFT volume is generated by people trying to game the system to get an airdrop.
But let’s see what else is driving up the hype.
In the last 30 days, 3 collections have made up 40% of the total NFT volume. Those collections are BAYC, MAYC, and Captainz by Memeland.
Here’s what I think happened:
1. ApeFest Speculation
Last week, we wrote about how Solana shared a bunch of exciting news at their Breakpoint conference, which drove up the price of $SOL close to 100%.
I think that people expected the same to happen at ApeFest, which just ended this weekend, so they bought NFTs, hoping they’d go up in price.
2. Memecoin Airdrop
Last week, Memeland by 9GAG airdropped its Memecoin token. Ahead of the airdrop, many people traded Memeland NFTs like Captainz, Potatoz, and YOU THE REAL MVP to be eligible for the airdrop.
It’s clear this happened, since the floor price of these NFTs tanked after the airdrop was distributed.
The Captainz down 31% 📉
The Potatoz down 23% 📉
YOU THE REAL MVP down 10% 📉
You may be thinking that there’s some more to this than just hype around narratives, but when I look onchain, I don’t see things that contradict this theory.
Here’s the amount of unique buyers. Since July, we’ve been ranging between 25k and 35k buyers. A stagnation that suggests that there’s no new entrants in this space.
And we better hope that there’s no newbies in this space because in the last 30 days, 510K people lost money with NFTs while only 41K realized a profit. 😬
That’s insane. 😲
Lastly, I wanted to share the floor price of the NFT market. Here’s the Blue Chip Index, showing the market cap of the biggest NFT collections out there.
You’ll see that it’s up, which is good.
However, it mirrors the price of $ETH in the last month almost identically.
So, it’s more likely that the recent surge of the NFT market was actually just driven by the rise of $ETH.
Keep reading for our conclusion.
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Conclusion 🧵
Let’s answer the questions from the intro:
Are we back? Will NFTs head to higher highs in the near future? Should you FOMO back into NFTs?
I’ve recently shared on Twitter that if $ETH can break the $1,900 resistance that it’s facing right now, it will break out and run to a new high, likely in the mid $2,000s range.
It’s game on.
$BTC and $SOL have already broken out.
Soon time for $ETH to follow
If that happens, then NFTs will probably follow, as people will move $ETH down the risk curve, into the NFT market. Remember how money flows in crypto.
But that doesn’t mean you should FOMO into NFTs now!
As shown above, NFTs are heavily fueled by short-term hype like the Blur Season 2, the ApeFest conference, the Memecoin airdrop, all the celebs talking about NFTs and more…
That’s probably not enough to sustain the price over the coming period, after the hype inevitably dies out.
Lastly, I wanted to remind everyone that the NFT market is still heavily dominated by PFPs in terms of volume.
But if you’ve been a long-time reader/listener of Web3 Academy, you’d know that the use-case for NFTs goes far beyond just PFPs.
However, we’re yet to see true mass adoption, which is why the PFP narrative – which is often very speculative – still remains the strongest.
If you want to fully grasp how NFTs will go mainstream, then I suggest you listen to Jay and our friend Herbie in a recent podcast episode.
Thanks for reading. And remember, you're strong, you’re powerful, you’re alpha! ❤
Today’s piece was a little different than usual & I’m curious to see how you liked it.
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Disclaimer: This article is for informational purposes only and not financial advice. Conduct your own research and consult a financial advisor before making investment decisions or taking any action based on the content.
