For the past six months, auctioneers have been selling a computer-generated illustration by Mike Winkelmann, the digital artist named Beeple; Hot Wheels digital art from Mattel; and even a column in the New York Times.
But the highly speculative market for NFTs has also cooled in recent months.
On May 9, the price of ether, the cryptocurrency that the value of NFTs is pegged to, rose to $ 3,883, more than five times its price at the beginning of the year, according to coindesk.com. At that point, weekly completed sales of NFTs on dedicated marketplaces on the Ethereum blockchain (not including Christie’s and Sotheby’s auctions) peaked at $ 176 million, said nonfungible.com, which depicts the performance of the NFT market.
By May 20, weekly NFT sales had plummeted to $ 19.2 million, an 89 percent decline, and dropped below $ 20 million, according to the database. The price of Ether has also fallen, falling below $ 1,800 in June.
This correction of NFT sales, or “stabilization phenomenon” as the blog nonfungible.com preferred to call it, was in part due to the sharp drop in the price of ether as well as the age-old, always irrational boom cycle and bust.
“Things have calmed down,” said Anders Petterson, co-author of the NFT Art Market Report published in May by ArtTactic, a London-based art market analyst.
“The NFT market was getting so high that people began to wonder what the value was,” said Petterson. “It was saturated. There was a huge supply of new artists and we don’t have a qualitative standard. If you can’t explain the value beyond that people buy it, it becomes difficult. “
But the traditional top-class auction houses with their impressive global marketing engines continue to set unique benchmarks for NFTs. In June, when the Nifties marketplace was reportedly still in the doldrums, Sotheby’s sold a rare “Alien” CryptoPunk for a record $ 11.8 million, the second highest price ever for a single NFT.