Opinion: WSJ is wrong when it says NFT markets are dying

Not long ago, the “Wall Street Journal” published an article saying that the NFT market is collapsing. This article refuted the “Wall Street Journal”‘s view, arguing that the “Wall Street Journal” published views are wrong and misleading. What is the content, let’s see it together.

Data compiled by The Wall Street Journal shows that the NFT market is “shrinking,” yet active players in the NFT space know that this is clearly not the case.

‘Suspicious’ data collated by The Wall Street Journal

Contrary to what The Wall Street Journal says, the NFT market did not “collapse.”

In an article published a few days ago in The Wall Street Journal, journalist Paul Vigna claimed that NFTs are dying.

The article begins with two bold claims: the average daily sales of NFTs has dropped by 92% from a peak of around 225,000 in September last year, and the number of active wallets trading NFTs has also dropped by nearly 90% from a high of last November. .

The set of statistics seems to paint a “dead” picture, but anyone who takes a close look at where they came from and how they were produced should be aware that they don’t stand up to scrutiny. 

According to Vigna, these statistics come from NonFungible.com (hereafter referred to as NonFungible), a platform that calls itself NFT market data and analytics.

Specifically, this set of data from The Wall Street Journal appears to be from the “NFT Market 2022 Q1 Report” published by the NonFungible website on April 28, but the report only shows a limited range of data. 

The report said its data included transactions of ERC-721 NFTs on Ethereum, NFTs used in Play-to-earn game Axie Infinity on the Ronin chain, and NFTs on the Flow chain.

Given the large number of Ethereum NFTs now using improved contracts such as ERC-115 and ERC-721A, NonFungible’s sample is biased towards “older” NFTs and excludes many newer NFT collectibles.

For example, Azuki is currently the sixth most traded NFT project, and since it uses ERC-721A contracts, sales figures for that project are not included in the report published by NonFungible. 

Additionally, Ronin and Flow, the two Ethereum sidechains included in the NonFungible report, both had a bad time.

Ronin, used for blockchain game Axie Infinity, suffered a serious crypto hack not long ago, in which attackers stole nearly $550 million worth of ether and USDC (a USD-pegged stablecoin) from the Ronin cross-chain bridge. currency).

Following the incident, Ronin was working to rebalance its in-game economy, and as a result, its player base plummeted.

And Flow has seen its biggest NFT product, NBA Top Shot, fall out of favor in recent times. NBA Top Shot secondary market sales have fallen by more than 80% since February 2021. 

For some reason, NonFungible’s data also ignores NFTs on other blockchains, such as Solana and Polygon. 

According to CryptoSlam, Solana processed more than 21,000 NFT transactions in the past 24 hours (at the time of editing of this article), with a total transaction value of $7.3 million. Polygon, while smaller, also generates over $1 million worth of NFT transactions per day.

NonFungible’s data excludes the second and third most active blockchains for NFT transactions, so the data it publishes does not accurately represent the industry as a whole. This also shows that the Wall Street Journal’s claim that the data shows that the NFT market is “dead” is misleading at best. 

The “Most Favorable” NFT Case Selection 

As Vigna’s article continues, he tries to support his thesis by presenting the example of a “sharp drop in NFT value.”

The first case he made was related to the NFT of Twitter co-founder Jack Dorsey’s first tweet. The tweeted NFT sold for $2.9 million in March 2021, and purchasers have struggled to sell the NFT since.  

It’s worth noting that Dorsey’s tweet about the NFT sale coincided with the first wave of NFT craze, when Beeple sold its work for a staggering $69 million at Christie’s auction house, thus setting off the first NFT craze.

In that sense, it’s no surprise that Dorsey’s high-profile tweet NFTs haven’t found another buyer right now. But to say that this one example represents the entire NFT field shows its astonishing “ignorance”. 

Just three days before Vigna’s article hit the front page of the Wall Street Journal, Yuga Labs, the team behind the Bored Ape Yacht Club, conducted the largest NFT sale in history.

The sale includes more than 55,000 lands for its upcoming Metaverse game Otherside, which gave Yuga Labs more than $310 million in initial sales.

In less than a week since the sale officially started, the series has seen more than 27,000 transactions and over $700 million in transactions.

Opinion: WSJ is wrong when it says NFT markets are dying

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Otherside’s land sale is not an anomaly. During the first four months of 2022, several new NFT projects such as Azuki, Okay Bears, Moonbirds, and VeeFriends Series 2 were highly anticipated by fans and sold out quickly upon release.

In addition to this, transactions in secondary markets such as OpenSea are also booming, with a volume of $3.4 billion in the last month, bringing considerable profits to many. 

Just taking two of these series of NFTs as an example, VeeFriends Series 2 and Okay Bears have combined sales of nearly 20,000 units in the past week. While Vigna said in his article that the current weekly sales of NFTs are around 19,000, he is clearly wrong.  

Vigna’s article also highlights The Doggies series of NFTs curated by famous rapper Snoop Dogg.

Doggy#4292, one of the rarest NFTs in the series, was traded on the secondary market for 9.69 ETH in early April this year.

Vigna said the NFT is now being auctioned with a price tag of over $25 million. In fact, it is very common in the NFT space for NFT owners to sell NFTs at ridiculously high prices, and this behavior may encourage NFT whales to bid at high prices, or it may make people think that the NFT owner does not actually have Intention to sell the NFT.

Opinion: WSJ is wrong when it says NFT markets are dying

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The “current highest bid of 0.0743 ETH” mentioned by Vigna is likely to come from a “scalping bot” that sends an offer below the reserve price to NFT owners in a designated collection. The “bid” describing it as an “auction” shows the editor’s lack of research, while showing that the report was not discreet and worrying. 

Vigna claims that the market has lost interest in NFTs, but the truth is that he has no idea where to look for “these interest.”

For those who follow the space every day, the NFT craze continues. The vast amount of data available shows this.

OpenSea, the largest NFT marketplace, now regularly exceeds $10 million in daily revenue, compared to an average of $6 million to $7 million in daily revenue for the platform in November 2021.

Data from blockchain analytics service Nansen paints a similar picture. Popular NFT series such as Azuki, Clone X, and Doodles have seen rapid market capitalization growth, according to Nansen’s Blue Chip-10 Index. The index has risen 81% since the beginning of the year and is now at a record high.

Why are NFTs so sought after?

The final error to be corrected in the WSJ article is the so-called “supply and demand imbalance” in the NFT market.

Vigna’s suggestion that the supply of NFTs is outstripping buyers is a sign that the NFT market is collapsing. While this may be true for traditional stocks, it’s dead wrong for NFTs’ value propositions. 

It would be dishonest to make such an argument. It’s like saying no one wants to buy shoes because there are thousands of ugly, low-quality sneakers sitting on store shelves with no one to buy, even though many are snapping up Nikes and Adidas and the limited-edition Yeezy on the secondary market The price is several times the retail price. 

From the perspective of the traditional art market, the supply of physical paintings far exceeds the demand of art collectors, but this does not mean that the art market is going downhill.

The threshold for creating NFTs is very low, which is a good thing for some budding creators, but it also means a lot of garbage will be minted from it.

When each NFT series is traded according to its own characteristics, it does not make sense to measure the entire NFT market in terms of supply and demand.

This is evidenced by the recent Otherside-related NFT offering by Yuga Labs. At a time when other NFT projects struggled to sell 55,000 NFTs for thousands of dollars each, Yuga Labs did it, while still disappointing thousands of fans who weren’t lucky enough to get the series of NFTs. 

Surprisingly, NFTs appear to be the only crypto-assets currently ignoring the volatile macroeconomic outlook.

While the Federal Reserve is raising rates and risk assets are sliding, NFTs are still attracting money from speculators and value seekers. In response to additional economic uncertainty, NFTs may shrink in the future.

If inflation “eats” the disposable funds that ordinary people have, this could reduce demand for non-essential items like NFTs. But for now, contrary to what The Wall Street Journal might have you believe, the NFT market is booming.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/opinion-wsj-is-wrong-when-it-says-nft-markets-are-dying/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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