Whats the next step for digital collectibles?
CryptoPunks, one of the most popular non-fungible tokens displayed in Times Square on May 12, 2021. Non-fungible tokens took the art world by storm earlier this year. NFTs are a type of digital asset designed to show someone that they own a unique virtual item, such as online photos and videos or even sports trading cards. In March, South Carolina-based graphic designer Beeple, real name Mike Winkelmann, sold an NFT for a record $ 69 million at a Christies auction. Twitter CEO Jack Dorsey sold his first tweet as NFT for $ 2.9 million later this month. More recently, a rare digital avatar known as CryptoPunk sold at Sothebys for more than $ 11.7 million on Thursday. NFTs total sales reached $ 2 billion in the first quarter, according to data from Nonfungible, a website that tracks the market. But new data shows the NFT hype is discoloration. Global sales dived from a seven-day peak of $ 176 million on May 9 to just $ 8.6 million on June 15, according to figures from Nonfungible. This means that volumes are now roughly back to their early 2021 level. Meanwhile, the prices of the main NFT seem to slip. CryptoPunks, one of the most popular NFT projects, went from a weekly average of $ 99,720 in early May to $ 50,840 in early June. Prices for SuperRare digital art have fallen on average from a record high of $ 31,778 to $ 5,342 over a similar period. One of the main reasons for the sharp decline in the NFT market has been a sudden rise and fall in sales of new crypto collectibles called MeeBits made by the creators of CryptoPunks according to Gauthier Zuppinger, COO of Nonfungible. The point is, anytime you notice such a rapid increase in a trend, you will see a relative decrease, which basically means stabilization in the market, he told CNBC. Geoff Osler, CEO and co-founder of the NFT S! NG app, said the craze for digital collectibles was likely due to the pent up demand for the wealth accumulated from rising crypto prices. -currencies, and that the market now appears to be calming along with a decline in the crypto markets. Bitcoin, for example, went from a record high of nearly $ 65,000 in April to just over $ 39,000 on Monday. Supporters of NFTs do not see the recent downturn as the end of the road to the market. High-profile NFTs sold for millions of dollars were a sure sign that the market was treating them as speculative assets, Nadya Ivanova, COO of LAtelier, a research firm affiliated with BNP Paribas, told CNBC . And by definition, speculative asset markets are volatile and likely to dry up.