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It isn’t just crypto prices that have suffered as a result of last week’s FTX implosion – NFT prices have taken a hit as well. Right across the board, NFT projects are suffering from the fallout, as fears grow that projects were holding funds on the exchange and holders are forced to sell in order to fill gaps in their portfolios left by FTX. Bored Apes and Mutant Apes are both down 19% since doubts about FTX first began, while Azuki NFTs are down 11%. NFT activity in general has taken a massive hit too, with sales volume down over 30% in the last week alone.
NFT Holders Not Insulated From FTX Collapse
If NFT holders were hopeful that the lack of exposure of the NFT market to FTX would insulate them from the fallout they have been sadly mistaken. As data from Nonfungible.com shows, the volume and value of NFT trading, in general, has fallen since FTX’s issues were made public:
There was in fact no metric that looked good for NFTs in the wake of FTX’s collapse:
Naturally, this has had an impact on NFT collections themselves, with very few collections escaping unscathed by the downturn. The Bored Ape franchise dropped by an average of 11%, with Bored Ap Yacht Club NFTs falling to levels not seen for almost a year, down 64% from their May 2022 highs. Doodles are down 10% in the past week, while Moonbirds are down 13%.
Multiple Reasons Why NFTs are Dropping
A few theories have been suggested as to why NFTs have suffered as a result of the FTX affair along with cryptocurrencies, although not as severely. One reason is the overriding fear that a further industry-wide collapse is on the cards, aided by the larger economic issues at play, and they want to get out while they can. Another is that some holders lost funds on FTX and so are selling their NFTs for liquidity.
There are some, unfortunately, who tried to take advantage of the FTX crash to profit themselves, putting out spurious claims that certain projects held their treasuries on FTX and urging NFT holders to get out while they could in an attempt to artificially drop the price:
This claim, which was proved to be a lie, helped precipitate a fortunately small depreciation in the Sappy Seals floor price (2.4%), but it shows the impact that stoking fears can have and shows how personal research is critical to avoid NFT holders falling for tricks such as this.