Why BAYC Has Been One of NFT Collections Most Affected by the FTX Crash
- The prices of Bored Ape Yacht Club NFTs are falling due to the collapse of the FTX exchange.
- Sellers are taking low-value offers in order to quickly liquidate their NFTs
The sudden liquidity crunch faced by FTX, as well as its alleged mismanagement of customer funds, have resulted in a slump in the value of broad strokes of the crypto market—and the NFT sector has been no different.
Amidst these struggles, the value of NFTs in the ‘Bored Ape Yacht Club’ (BAYC) collection has been steadily decreasing in value as the price of Ether (ETH) tumbles, leading to holders panic-selling their NFTs.
CryptoPunks Collection Flips BAYC
Based on data of the NFT price floor, the cheapest available BAYC NFT on the market is currently listed for 54.54 ETH at the time of writing.
Source: NFT Price floor
Metrics from CryptoSlam, an NFT collectibles data aggregator of numerous blockchains, including , WAX, and FLOW, also indicates a decrease in sales.
In October of 2022, the NFT industry recorded a trade volume of $31,275,729.82, while so far in November it stands at $23,330,998.78.
Why BAYC Is Crashing in Value
There are numerous factors as to why BAYC prices are eing pushed down, with the general crypto market crash that has followed in the wake of FTX’s collapse primary among them.
Data from Flipside Crypto, as shared by Proof Director of Research “Punk9059”, indicates that there has been notable increase in trade activity on leading NFT marketplace OpenSea. Furthermore, traders have been using Wrapped Ethereum (WETH) in place of standard Ether (ETH), as WETH trades surged to use in more than 50% of executed transactions.
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WETH trades as a percentage of total OpenSea volume is above 50% for the first time today. The chart below is pretty wild.Everyone accepting the bids that are out there. This is up from 40% when I tweeted this chart earlier. pic.twitter.com/5Zo66UPLfF
— NFTstatistics.eth (@punk9059) November 9, 2022
Placing a bid to an NFT on OpenSea requires WETH, so when this number increases, it gives us the perspective that more NFT owners are accepting bids placed on their assets.
BendDAO also had a role in this protocol, letting users take out crypto loans using valuable NFTs as collateral.
BandDAO auctioned 19 BAYC NFTs from liquidated loans, out of which five remain as of November 14, 2022.
Some crypto enthusiasts have even speculated that the decline experienced by BAYC is due to the illiquid ApeCoin (APE), a major cryptocurrency in the BAYC ecosystem. The token suffered greatly due to a substantial amount of APE tokens being held on the FTX exchange.
The FACTS regarding @yugalabs current situation – Majority of @apecoin was held in @FTX_Official (Freezing Nearly all their Liquidity.- @SBF_FTX holds A LOT of @BoredApeYC grails that will be liquidated.- $APE has next to no Liquidity due to FTX exposure.100% of Insolvency! pic.twitter.com/gK4BGFvarW
— 0xTre.eth Rare ENS Plug (@GlobalTourism_) November 11, 2022
On the Flipside
- The NFT space is now more active than before, as a high volume of NFTs move from one cryptocurrency wallet to another, indicating that genuine interest still remains in the nascent digital art space.
- ‘CryptoPunks’ still trails BAYC in terms of all-time NFT sales, according to data from CryptoSlam.
Why You Should Care
Bored Ape Yacht Club (BAYC) NFTs originally saw a surge in popularity and use among celebrities, resulting in the collection ballooning in price, especially compared to CryptoPunks. However, in the aftermath of the FTX debacle, the premier collection has become more accessible.
While the sector’s declining value has hit a lot of investors hard, it has made room for NFTs to regain the spotlight, and will likely contribute towards an increase in the popularity and overall sales of NFTs.
Learn about OpenSea’s NFT royalties enforcement policy:
OpenSea Launches Tool to Enforce NFT Royalties for New Collections
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