NFTs Present Indicators of Life

NFTs: Emotional Swings

If crypto trading is still a niche activity, then NFTs are a niche within a niche, and the past year has seen the pool of active market contributors gradually narrow down to real believers. Overall, NFT trading volumes fell, new wallet trades fell, indicating fewer new participants, and NFT interest on Google Developments confirmed a running decline (with the exception of the brief uptick in interest caused by Donald Trump’s launch of an NFT collection last month).
None of this disproves the possibility that events have transpired within the NFT household. There have been new collections launched and occasional bursts of workout, however, on the entire, the temper has modified drastically. Defaulting to the assumption that any positive run was extremely short-term and not to be trusted, there was an air of aggressive ruthlessness, a realisation that without new merchants, existing funds had merely been rotating around tasks, and a deep lack of conviction in any upward value actions.
Fast forward to the present day, the middle of January, and you’ll find that public opinion on NFTs has shifted dramatically. There is talk of a bullish trend forming as prices rise, new developments from prominent collections line up, and demand remains high. Blue chips, a term used more casually in NFTs, are among the top gainers, as are the Yuga Labs collection NFTs, the Azuki NFT, and the Sorare Soccer NFT. The good news, however, has spread. Some less popular collections have seen an uptick, and all of a sudden, starting a new enterprise doesn’t seem quite so daunting.
Monitoring new wallets has shown that there has not been a significant surge in new contributors entering the market (as might be normal in a significant bull run), therefore it is not immediately evident what is driving these NFT value increases. A significant factor to think about is the simple association it has with the price increases of Bitcoin, Ethereum, and alternative cryptocurrencies. By this reckoning, bullish attitude in crypto overall might result in patiently shelved NFT aficionados dusting themselves off and reentering the market, urging others to do the equivalent. This dovetails well with a few emerging trends at pivotal jobs, most notably those at Yuga Labs and the PROOF Collective. Particularly Yuga is generating massive amounts of buzz, and with NFTs, excitement tends to spread rapidly. And now we have Blur, a new NFT trading platform that is driving activity through its forthcoming token rewards programme, with merchants wishing to increase their token allocations in preparation for an airdrop. Additionally, borrowing has increased on a decentralised system known as BendDAO since NFTs can be used as collateral to acquire ETH loans. After BendDao increased collateral ratios for Bored Ape Yacht Membership, Mutant Ape Yacht Membership, and CryptoPunks NFTs in December, allowing holders to borrow more ETH, this activity is focused squarely on Yuga Labs’ property.
We have a situation where Yuga asset holders, who are not typically thought of as risk averse, are borrowing money against their Apes so that they can invest in NFTs.
Is Present Bullishness Sustainable?
Since NFTs are extremely volatile and consume attention like fuel, their prices can quickly skyrocket and then crash, therefore caution is warranted in light of the recent uptick. There are distinguishable terminal factors for a few of the possible drivers of growth. When Blur finally airdrops its ecosystem tokens to retailers, the incentive to use its network will skyrocket. It’s possible that Blur has established itself as a formidable rival, but market conditions may and do shift, and the floor price (the lowest possible price for an item in an NFT range) could fall. Yuga is preparing a long-term interactive event using NFTs and ApeCoin, and while we expect everyone involved to have a good time, we also expect their enthusiasm to wane and their attention to shift elsewhere once the event is over.

Borrowing and Its Effects on BendDAO
Borrowing on BendDAO has given the cryptocurrency market expertise with the impact of excessive leverage on rapid deflation in market sentiment. Positive outlooks suggest that present drivers could lead to a transition towards the longer-term positive trend of NFTs. This situation could be complicated by a dearth of new traders, but it could pave the way for even greater gains if many positive triggers succeed in setting off a protracted upswing in the cryptocurrency market. Despite the market downturn, many significant NFT initiatives have emerged stronger than before. This optimism is only temporary, but it serves as a reminder that development in the creative sphere has not stopped at all; rather, it has been muted throughout the winter months. If the fuse is ignited, the market for NFTs has the potential to explode.