You’re not going to get financial markets quotes that are much better than this:
An NFT of the first tweet from Twitter Inc. co-founder Jack Dorsey sold in March 2021 for $2.9 million to Sina Estavi, the chief executive of Malaysia-based blockchain company Bridge Oracle.
Earlier this year, Mr. Estavi put the NFT up for auction. He didn’t receive any bids above $14,000, which he didn’t accept.
Mr. Estavi said failure of the auction wasn’t a sign that the market is deteriorating, but was just a normal fluctuation that could occur in any market. The NFT market is one that is still developing, he said, and it is impossible to predict how it will look in a few years.
“I will never regret buying it because this NFT is my capital,” he said.
It’s true, 99.5% drops are possible in any market! And yet! In general when you buy something and its price drops 99.5%, you say things like “oops” or “boy I regret buying that thing.” “I will never regret buying it because this NFT is my capital”! Not anymore it isn’t! Incredible stuff. Anyway that’s from a Wall Street Journal article about rough times in the market for non-fungible tokens. There is so much:
Another NFT buyer purchased a Snoop Dog curated NFT, titled “Doggy #4292,” in early April for about $32,000 worth of the cryptocurrency ether. The NFT, an image of a green-skinned astronaut standing on what looks like a Hollywood Walk of Fame star, is now up for auction, with an asking price of $25.5 million. The highest current bid is for 0.0743 ether—about $210.
I love it. The last trade was $32,000, the bid is $210 and the offer is $25,500,000. It is either up 80,000% or down 99%. “Someone is wrong here,” is the obvious conclusion, but I am tempted by the only slightly less obvious “everyone and everything is wrong here and I wish I had never heard of any of it.” Fischer Black famously defined “an efficient market as one in which price is within a factor of 2 of value, i.e., the price is more than half of value and less than twice value.” For NFT markets, if the price is within two orders of magnitude of value — that is, the price is more than 1% of value and less than 10,000% — then that’s pretty good.
Elsewhere in NFTs:
Crypto lender Nexo says it has issued one of the largest loans backed by NFTs in crypto’s history and that two rare CryptoPunks Zombies were used as collateral.
Nexo said the 1,200 Ether loan, worth more than $3.3 million, was issued to an unnamed borrower who put up the Zombie NFTs as collateral. The 60-day loan carries an annualized interest rate of 21%.
The transaction shows how the financialization of NFTs has gained in sophistication since nonfungible tokens surged in crypto markets last year.
I guess? Or you could get a credit card? To borrow money for two months at 21%? But, fair, two months is an eternity in the NFT market. I wonder if there are margin calls.
And elsewhere in crypto, Bitcoin has been range-bound and not particularly volatile. “Aha, a good store of value,” you say, “this should help with institutional adoption,” but the counterargument is “this is boring, when Lambo.” Bloomberg News reports:
It’s a remarkably listless state of being for an asset that’s long been known for its volatility. David Duong, head of institutional research at Coinbase, attributes its tepid moves to the macro environment — weaker growth and higher inflation have been acting “as a drag on crypto.”
So what’s needed for a breakout? “We have seen the carry-over of many important crypto-specific themes from last year but very little in the way of new ‘top down’ narratives, which are crucial to the ‘hype cycles’ in this space,” Duong wrote in a note, meaning that the market may stay lukewarm until something exciting happens.