NFT Market Review

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Written By Hossein Soltani

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The weird and wonderful world of NFTs has had its fair share of ups and downs in a year where crypto markets have stuttered, and economies have struggled to return to business as usual.

However, there is still as much to talk about as ever, with Tiffany launching a new crypto jewellery concept, a limited-edition posthumous tribute to David Bowie, and the potential that Board Ape Yacht Club is taking on water.

Bored Ape Yacht Club Slowly Starts To Sink

A lack of returns on NFT investments has hit Bored Ape Yacht Club (BAYC) hard, with total sales slumping under $60 million (£54.25 million) in August, with under 300 unique buyers and an average sale value of $130,000 (£117,500).

If those statistics don’t look too bad, it’s worth a little context:

  • Sales in May reached $223.72 million (£202.28 million), 63 per cent higher.
  • Buyer volumes have fallen by 90 per cent.

BAYC has been a shining success story and previously leapt ahead of CryptoPunks as the NFT collection with the highest recorded sales volumes.

Now, the downward market sentiment that has impacted NFT sales has filtered through to BAYC. It had 263 buyers in August, a 16-month low and the lowest of any month this year.

Unique buyers are essential because they help to gauge demand and investor interest in an NFT collection. For example, when 141 individual buyers bought BAYC NFTs in April 2021, it cemented the status of collectable digital art. That interest increased unique buyers by 2,418 per cent, achieving 3,550 individual sales in May 2021.

Last year was a resounding success for much of the crypto market, with ICP and Ethereum both hitting new record highs, and BAYC was in on the action with a monthly sales volume of $17 million (15.4 million), compared to $37,557 (£33,960) in its first month.

Drops in unique buyers translate to lower overall sales. Reducing from 611 buyers in May to 424 in June saw revenue retract by 63 per cent from $223 million (£201.6 million) to $82 million (£74 million). The trajectory didn’t stop there, with a further contraction to 290 July buyers and 263 in August.

Bored Ape’s native token, ApeCoin, has also been affected, losing 29 per cent of market value and achieving low trade prices of $4.61 to $7.68 (£4.17 to £6.94).

Starly Launches A Davie Bowie Memorial Collection

David Bowie is a legend in the music industry and one of the most celebrated artists of the generation, having spent 40 years at the top and releasing 25 studio albums.

It is no stretch to think that Bowie would have embraced the NFT marketplace as an innovative artist who was the first significant act to release a single solely available to download online. Telling Lies was released in 1996 and took about 11 minutes to download – reliant on internet speeds as they were at the time.

Bowie also announced in 1998 that he was launching his very own ISP, called BowieNet.

Six years after his death, the NFT marketplace Starly is honouring Bowie with a tribute collection created with Melos Studios, Bowie’s photographer Denis O’Regan, and the David Bowie Estate.

The one-off, unique collection comprises 12,000 NFTs:

  • 120 Legendary, 3000 Rare and 8,880 Common NFT cards.
  • Packs are made up of one Rare, two Common and one random card – there is a four per cent chance of finding a Legendary card.

Collectors can invest in never-before-seen photography, unreleased music, and an audio recording of Bowie delivering a monologue and laughing in a rehearsal.

Melos Studios is a Taiwanese NFT marketplace created in 2020 to showcase work from musicians, artists and content creators, primarily bought by fans and collectors. The team behind the project include blockchain developers who have developed this create-to-earn model.

Tiffany Introduces CryptoPunks To The Luxe Jewellery Market

Tiffany & Co, the famous jewellery fashion house owned by LVMH, has made its debut on Web3, with an exclusion production run of 250 customised pendants.

The iconic Tiffany blue packaging inspired the NFT pass. Pendants were available to buyers with CryptoPunk NFT profile images between 5 and 12 August 2022. Buyers could order an NFTiff Pass for 30 ETH, worth roughly £36,092, through nft.tiffany, connecting to their digital wallet.

Designers will interpret each CryptoPunk into a custom pendant, using at least 30 precious and semi-precious gems, including amethysts and sapphires. Each pendant has the Tiffany logo and the CryptoPunk series on the back.

These handcrafted pendants are hung on an 18-carat gold chain, with five diamonds on the clasp, with the links designed to mimic pixels. Buyers received a digital NFT rendering plus an authenticity certificate while they waited for the pendants to be dispatched early next year.

While this might seem an unlikely pairing, it isn’t the first time Tiffany & Co has dipped its toes into the Web3 world.

  • In March 2022, the brand announced it had invested in a $380,000 (£343,600) NFT.
  • It also launched TiffCoin crypto – as an April Fool’s prank.

The joke paid off as a subtle marketing ploy for the forthcoming limited edition gold pendants.

This newest project sold out and was created on the launch pad built by Yuga Labs, the parent company behind BAYC. Yuga Labs purchased all of the CryptoPunks intellectual property rights and announced that it intended to give commercial rights to every CryptoPunk owner.

In turn, this meant that projects such as the Tiffany pendants could proceed, as owning an NFT token means that the owner holds rights with the IP they build but that the JPEG file can be reimagined in other mediums.

CryptoPunk owners are effectively commissioning a new intellectual property created from their NFT, although only existing holders were eligible to purchase one of the pendants.

Other big-name brands have tried their hand at NFT marketing, with Chevy listing an NFT accompanied with a 2023 Corvette – although the auction did not achieve any bids. Alfa Romeo also started throwing in an NFT with the new Tonale SUVs.

Collaboration Between Tyler Hobbs And Dandelion Wist Sells Out

While there is a lot of negative news around crypto and NFTs, some projects remain successful. For example, on 28 September, Tyler Hobbs and Dandelion Wist introduced their new generative art collaboration called QQL.

It sold NFTs worth almost $17 million (£15.3 million) in one day, perhaps due to interest in the Art Blocks Fidensa creator.

Dandelion Wist is a co-founder of the Archipelago creative platform that launched the NFTs and saw the collection sell out. There were 900 NFT mint passes, sold for 14 ETH each, worth approximately £16,845.

The creators have reserved a further 99 mint passes for future surprise collaborations.

One pass entitles the holder to mint one piece within the QQL collection, customised with Hobbs’ algorithm, which provides interactive tools to generate unique NFTs.

In an unconventional approach, the QQL launch used a modified Dutch auction pricing system, gradually reducing prices. However, when the auction closed and the final NFT pass sold for 14 ETH, it determined the price for all other buyers.

Investors initially paying more were invited to claim a refund for the variance.

NFT Market Review FAQ

Why is the NFT market struggling?

Unsurprisingly, NFT values are linked to cryptocurrency, and the turmoil around crypto pricing has hit NFTs, too.

Many see market volatility as a response to NFT hype. Still, the connection between NFTs and crypto means that a decline in one market is mirrored in the other.

Declines in the dollar value of ETH have escalated drops in NFT activity, with floor prices for collections heading south as quickly as cryptocurrencies. Entry prices for some NFT collections have lowered by over 17 per cent.

How big will the NFT market become?

In 2022 the global NFT market will be valued at about $3 billion (£2.71 billion). If forecasts by MarketsandMarkets are correct, the sector will grow to $13.6 billion (£12.3 billion) by 2027.

Will crypto recover in 2023?

Much is unknown, most analysts predict that crypto will recover from downward trends in 2022, although estimates about how long that might take are varied.

The crypto market is thought to move in a four-year cycle, which could mean tokens don’t reach last year’s highs until 2026.

What is the most expensive NFT sold so far?

The biggest sale was a series called The First 5000 Days, created by Mike Winkelmann, better known as Beeple. The collection sold for $69.3 million (£62.66 million) in March 2021.

How badly has the NFT market fallen?

Consumer confidence and investor speculation have dropped, with market participation falling 88 per cent overall in June. NFT average sales values have fallen 92 per cent since May.