Falling faster than the broader market? What is the future prospect of the sluggish NFT market?
Original Author: Bit Silly
Original text arrangement: Shenchao TechFlow
The recent malaise in the NFT market has created a lot of anxiety. Transaction volume, active addresses, and number of transactions have all dropped significantly, while the proportion of new users has also gradually declined.
Encryption KOL bit silly believes that most analysts are just piling up data without really understanding the market. Here are his thoughts on the NFT market.
Since February, both price and volume have fallen. The trading volume dropped from 36,000 eth per day to 10,000 eth; the blue chip index fell from more than 9,000 to 7,500. During this period, all the NFT bigwigs were overshadowed.
The number of transactions decreased, and the number of active addresses decreased significantly. Active addresses are down 90% from February. The number of transactions fell by about 80% from the month.
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Blur's impact on the NFT market
Some analysts said that Tieshun's Blur has harmed NFT.
One is that NFT cannot withstand high-frequency transactions. But in Bitsha's view, the increase in the frequency of NFT transactions is because the friction cost of transactions has been reduced. NFT transaction friction costs are reduced and transactions are smoother, which has slight benefits to asset prices. in addition,At present, the trading volume of NFT has dropped significantly, and the price of NFT has not stabilized.
The second is that Bur has popularized NFT and separated it from the niche circle, resulting in a drop in price. This logic is also untenable.Because NFT has been open and transparent on the chain since its birth, in the era of Opensea, everyone can watch the transaction.
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ETH goes up, so NFT goes down
Some analysts in the market said that because ETH has risen, NFT can't hold it anymore.
Ask them why, they faltered and said that NFT investors look at the U standard, not the currency standard.
A stupid question, and of course a stupid answer.
Look at the data,ETH price and NFT price are not completely negatively correlated.first level title
Why are local NFTs rising?
In such a sluggish market, even Yuga's transcendent operation ability can't maintain the price? Why is Azuki able to stabilize its rise?
It is tautology to say that demand is greater than supply.
Say PR is good, how to explain that the cooperation between Yuga and Gucci cannot maintain the currency price?
bit silly thinkThe important factors that cannot be ignored are the control rate and trading funds.first level title
NFT and the market rhythm are different
In November 21, the market peaked. As for NFT, it peaked in April 22. 5 months of delay.
From June to July 22, the market was rubbing against the bottom.
From June to mid-July 22, NFT saw another slight rebound.
What does this mean? illustrateThe NFT market has its own independent rhythm, which is out of sync with the broader market.
In the second half of last year, both NFT and the broader market fluctuated and fell, and no one felt that the NFT market was sick.
Bit foolishly thinks,It is still in the NFT bear market, and it is normal to fall.
It's not because the NFT market is sick, it's because the rhythm of the NFT market lags behind the broader market.
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Why did NFT fall faster than the market?
Because NFT requires less liquidity to maintain the same market value than homogeneous tokens.
Why do everyone in the bear market like to do NFT projects? Because money is not enough.
NFT projects can blow up a larger market value with less capital. In other words, the market value of NFT is more virtual than that of homogeneous tokens.
The characteristics of NFT itself: NFT can rise far beyond the market in a bull market, and shrink far beyond the market in a bear market.
Today's NFT market is sluggish, and Bitshape made a prediction in August last year.
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Look at BLUR in the context of the NFT bear market
1. Blur's trading mechanism dilutes the uniqueness of a single NFT chip and weakens the premium. This will lead to a slight decline in the NFT market.
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Will NFT never recover?
Since it is a bear market, NFT generally has two prospects.
One is that it keeps falling, never recovering from a setback, and has since disappeared.
The second is to rebound from the bottom and make a comeback.
Bit foolishly speculates,The probability of NFT dying out is very low.
First of all, the development of the online world has led to the need for digital artworks as a subdivided wealth storehouse. At present, NFT is the best carrier.
Secondly, NFT has formed a huge ecology, including developers, investors, game studios and Metaverse. This ecology has not yet died out, and when the bull market comes, it will have the power to fight.
Then, NFT represents an innovative form of ownership expression, which is an indelible innovation.
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When will NFT bottom out?
If we think NFT is back up again. Then the most important thing is to find out the big cycle of NFT.
The start of the last big cycle of the bull market was at the end of 2018 and the beginning of 2019, and the bull market ended at the end of 21. The NFT was launched in early 21 and ended in April 22.
Unfortunately, after the NFT market has grown into a large scale, it has experienced only one cycle, and the bear market is not over yet. The earlier NFT market size is too small for reference.
Bitshape believes that the NFT market is estimated to lag the broader market by 1-2 years.
If ETH bottoms out in June 22, the NFT market will bottom out around the end of 23. If the market is on fire before the end of the year, funds will overflow to NFT, which will lead to an early start of the NFT market.
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Selection of NFT
Here, bit stupid will not talk about specific projects, but talk about the big principles.
I am optimistic about the aesthetics of young people in the United States, but not in Japanese aesthetics.
European and American culture is still the mainstream of Web3, and everyone will pay for American taste.
The reason why I am not optimistic about the Japanese system is because Japan is in decline and is moving rapidly down the chain of contempt. When the country declines, artistic taste is despised.
NFT is divided into utility NFT and non-utility NFT.
Utility NFT is similar to lock-up NFT mining. The price of utility NFT will be more stable and will also bring a ceiling.
Non-utility NFTs are miserable in a bear market and useless. In the bull market, because there is no discounted cash flow constraint of the utility, the value can skyrocket.
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The old hunter is here
The NFT market at the moment has caused countless people's hearts to bleed.
But for the old hunter, it was just a little interesting.
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