NFT Market Meltdown: How Can Investors Best Position Themselves?

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NFT prices have plummeted in recent weeks, even as the crypto market continued to rebound. Here are some strategies for investors looking to take advantage of this underperformance. via ForbesCrypto

Anadolu Agency via Getty ImagesIn recent weeks, the floor prices of the largest and most prominent non-fungible tokens collections have plummeted. Popular blue chip projects such as CryptoPunks, the Bored Ape Yacht Club, Mutant Apes and Azukis dropped as much as 62% in the past month.

The NFT decline occurred against a backdrop of recent bitcoin strength. While NFT prices were dropping, bitcoin has continued to creep towards new yearly highs, now sitting at a year-to-date return of about 82%. However most altcoins, crypto assets other than bitcoin and ether, have not fared as well. This is signified by the rise in bitcoin dominance, which has reached above 50% of the total crypto market capitalization for the first time since April 2021.

In fact, just eight wallets traded 4,000 ETH or more on Blur in a single day in February, according to NFTstats.eth, pointing to concentration of trading among a few large players on the exchange. The few things I am doing as an investor: more time researching future blue chips to figure out if getting into a community makes sense. Can the project connect to actual products and services? That, to me, is the ultimate utility. I am also looking at what qualifies an NFT collection to be considered a current or future blue chip.”According to analytics site NFTGo, the NFT Blue Chip Index dropped 30% over the last 30 days and 54% for the past year.

 

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