You may remember that when we wrote about which celebrities were involved in the blockchain field, we wrote about "Big Brother" Huang Licheng, and emphasized that he has now become a supporter of NFT and has started his own accumulation and entrepreneurship in the NFT track. Unfortunately, the good times did not last long. Recently, Huang Licheng announced that he would withdraw from the NFT field.

Coincidentally, Franklin, known as the "veteran in the NFT field", also recently announced his withdrawal from NFT and sold a large amount of BAYC.

As the saying goes, there is no smoke without fire, and everything has its traces. From extreme admiration to running away, the 360-degree change in the attitude of NFT whales towards NFT investment is closely related to the recent decline in the NFT track. After all, many blue chips have plummeted, and it has become an indisputable fact that NFT has fallen into a bear market. So today, let's talk with you about what happened to NFT today? Has the market bottomed out? How will it develop in the future?

The performance of major NFT blue chips has been dismal in the past six months: the decline has been significant, and it seems that they are unable to recover for the time being.

In fact, the decline of the NFT market is not a recent phenomenon. Since the development of NFT blue chips reached its peak around August 2021, there have been declines to varying degrees and at different times. The reason for this is largely due to the serious lack of liquidity in the NFT market.

In other words, when the number of NFT transactions remains unchanged, the greater the sales, the better the liquidity. But now, the transaction amount, trading volume and traders of NFT generally fall by more than 90%. Although the total market value behind NFT is as high as billions of US dollars, "the number of traders is only in the tens of digits" and "the trading volume is only in the single digits" and other "ghost stories" are common.

Let’s take a look at the recent performance of several major blue-chip stocks.

CryptoPunks

CryptoPunks is the top player in the NFT field, with a market value of $2.4 billion. However, this bear market in NFTs clearly shows that the total market value is not a reference for evaluating its performance.

The highest historical price of CryptoPunks is about 124,000/ETH, and the highest daily trading peak occurred on October 25, 2021, which was about 550 million US dollars. In contrast, its single-day trading volume on May 15, 2023 was only 14 million US dollars, a drop of 97% from the highest point.

In terms of liquidity, CryptoPunks' 24-hour liquidity is 0.06%; one-week liquidity is 1.42%; liquidity in the past 30 days is 4.27%; and liquidity in the past year is 79.23%.

Bored Ape Yacht Club

Bored Ape Yacht Club, also known as BAYC. BAYC's total market value peaked on April 22, 2022, at about $4.43 billion; BAYC's daily trading volume peaked on April 30, 2022, at about $102 million; the recent daily trading volume has fallen by as much as 94% compared to the peak.

In terms of liquidity, BAYC's 24-hour liquidity is 0.1%; one-week liquidity is 0.6%; liquidity in the past 30 days is 3.34%; and liquidity in the past year is 109.48%.

It should be noted that the characteristics of BAYC’s transaction volume are significantly different from those of CryptoPunks. Although BAYC's trading volume also suffered heavy losses due to the NFT bear market, it basically has a cyclical change of "down, up, down, up", while CryptoPunks failed to recover after its peak.

Otherdeed

The peak of Otherdeed's total market value was approximately US$1.32 billion on April 30, 2022; the peak of daily trading volume was 15,227 NFTs on May 1, 2022; and the lowest point of daily trading volume was a staggering 99.8% drop from the highest point; the peak number of people trading on Otherdeed in a single day was 19,925 (May 1, 2022), while the lowest point was only 247 (July 22, 2022).

In terms of liquidity, Otherdeed's 24-hour liquidity is 0.14%; 7-day liquidity is 1.1%; liquidity in the past 30 days is 5.83%; and liquidity in the past three months is 55.7%.

Otherdeed is a project under BAYC, so it is expected that there will be no more peaks after the subscription.

The NFT market has entered its darkest hour. What are the deep reasons behind it?

The first point is the landmark event that caused a huge change in the market: Blur changed the rules of the game.

NFT has a high market value, but it is often in a situation where it is waiting to be sold at a price, but no one responds. What Blur does is to make NFT fully circulate in the market. Blur first reduced transaction fees to increase normal liquidity; then it established an NFT market-making mechanism through intense trading volume. Such a move can not only increase normal liquidity in the market, but also increase abnormal liquidity.

For example, the crazy selling of NFT bigwigs is a typical example of "abnormal liquidity". Not only are influential celebrities including Franklin and Brother Maji frequently bidding, but even "smart people" such as Mando/OSF will sell their long-held NFTs to high-priced buyers. As buyers trample on each other, the demand for NFT repurchases continues to decline.

NFT market problems have long existed, but the sudden appearance of Blur punctured a series of pink bubbles surrounding NFT. Without Blur, even if NFTs were sold, they would be slow; but with the establishment of NFT market liquidity, this sell-off was accelerated, which undoubtedly led to a huge change in the NFT market.

But after careful analysis, we will find that the fundamental reason for the bear market in the NFT track is the lack of empowerment of the market itself. Blur only gently knocked down the first domino, and then the whole body was moved.

Because of their inherent deficiencies, under the "disruption" of Blur, a number of NFT giants including Opensea have been continuously squeezed, and the market liquidity has been greatly improved, which has accelerated the bottoming out of the NFT market.