At its peak, the Bored Ape Yacht Club commanded an incredible $400k for even its lowest price NFT. Now however, despite still being unobtainable to the average human, its floor price has hit a low not experienced since the heady days of August 2021.
The change in fortunes for the BAYC collection can be attributed to a number of underlying factors. These include, general market sentiment, a perceived end of utility, whale sell-offs, and reduced media coverage. However, those in the know have concluded that recent activity in the Blur ecosystem may have had the biggest impact overall.
Earlier in the year, Blur caused a major commotion when it launched its rewards initiative. A move that sparked huge trading volumes in order to farm $BLUR airdrop tokens. This was then followed up by the launch of its Blend lending platform which allowed investors to unlock the ETH capital in their blue chip NFTs.
These actions created a perfect storm where a small number investors began trading high volumes of BAYC NFTs in order to farm additional rewards. The result however, sent the BAYC floor price into a death spiral, from which it has still yet to recover.
Yesterday Machi dumped 15 BAYC all in one go for ~$1m
Since then bids are down ~4E and he’s had another 30 BAYC dumped on him
Not really attractive for real bidders to step in and try to save these poor apes when the most notorious dumper on the blockchain is ready to slam a… pic.twitter.com/CLExboKuQw
— Cirrus (@CirrusNFT) June 23, 2023
Blue Chip NFTs Take a Hit Across the Board
Even though BAYC has experienced one of the largest nosedives across the blue chip NFT market, it is not alone in its change of fortunes. Fellow NFT heavyweight, CryptoPunks, has also experienced a sharp drop in value, albeit on a smaller scale than its ape brother.
The larger concern for the time being is number of these NFTs that remain locked in rental contracts. Essentially, as the ETH token price rises, and the NFT floor price declines, a potential liquidity crisis looms on the horizon. This then, in turn, could result in an event that may leave lenders with no option but to seize the collateral and sell it at a loss, further exasperating the situation. Only time, however, will reveal how the next few months will unfold.
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