Most popular collections’ prices are down at least 40% in 2024 ‘Crypto markets are all about capital rotation,’ analyst says

Many investors are betting thatBitcoinandEtherwill set fresh highs this year, but there’s one corner of the cryptocurrency market that is getting the cold shoulder:nonfungible tokens.

The tokens, better known as NFTs, which can be digital artwork of apes or other collectibles recorded on blockchains, are losing even more of their appeal. This month Google searches for NFTs hit theirlowestlevel since 2021, when the tokens began to enter the mainstream, according to Google Trends.

In the first five months of the year, NFT sales are down by more than 6% to $8.5 billion from the same period a year ago, according to researcherDappRadar. In stark contrast, the industry sold $17.2 billion of NFTs in one month back in January 2022 — its peak.

Sentiment worsened last month after the US Securities and Exchange Commissiontook its first steptoward approving exchange-traded funds investing directly into Ether. In advance of an approval, some investors began moving into Ether, and dumping NFTs, said Nicolas Lallement, co-founder of data tracker NFT Price Floor.

“Crypto markets are all about capital rotation,” Lallement said. “It is foreseeable that Ethereum will continue attracting and absorbing market capital, and causing price drops in other assets.”

Year-to-date, prices for many popular NFT collections are down 40% to 50%, according to NFT Price Floor. The floor price forCryptoPunks, which is minted on the Ethereum network and bought and sold with Ether, is around 2021 levels and is down 29% from its lowest point of last year, when the market wasso bad everyone thought the crypto-winter bottom hit. Popular collections likeBored Ape Yacht ClubandChromie Squiggle, by Snowfrohave price floors, based on Ether, that are about half of what they were at the lowest point of last year, said NFT Price Floor.

“We’re still seeing a majority of NFT collections continue to sell off or remain flat after peak euphoria in 2021,” said Daniel Maegaard, a well-known NFT collector, in an email.

Maegaard said he sold a number of his blue-chip NFTs recently, including works by digital artists XCOPY, Hackatao andColdie. Some NFT art collections from artists like XCOPY posted positive returns over the last 90 days, according to Lallement.

Also prospering is NFT marketplaceMagic Eden, which has been gaining market share as trading of tokens on its platform has picked up, according to Sara Gherghelas, an analyst at DappRadar. In April, it posted record volume, though it’s since decreased, according to DappRadar.