Why is the NFT market dumping?
Let’s talk about the most important reasons of a general market loss in this article.
People with big audiences, who first seemed like a reasonable kick to the popilarity and clout of NFT are ruining the idea. A regular action, you can see now, is some influecer promoting a collection in their Twitter with gaining a couple of tokens as the payment and selling them, during the pump, they provoke. All the minters are then left with illiquid assets, because the hype was a one-day action.
Currently, the market is facing a period, where people have discovered the formula of a “successful” collection: 500$ art-work, some Twitter giveaways with 5-10k Discord server income and some influencer PR (as seen in the first point). That leads to dozens of low-quality collections, fludding marketplaces.
Buying 30-50% of the collection, miners make the gas price grow significantly - that doesn’t leave people any other option, except dumping the project on aftermarket to reduce the gas and not burn out.
4. Meme-coins and newbie whales
Finance world is cyclical. Right now investments are flowing away from NFT projects into altcoins. In June the three reasons given above weren’t a thing and such players as Ethereum dumped the altcoins, making a freeway for NFT market growth. However, during August and the “NFT-boom” we started seeing more and more miners, one-day infuncer pumps and low-quality collections, that are giving sidecoins a chance once again. Another reason is lots of wealthy investors, who entered the game after the August hype and now see the clout sidecoins get, investing huge sums into them.
5. A deficit of resources
Moreover, the more experienced investors start taking their money out of the NFT market and spreading it all over those same altcoins. A great example would be Larva Labs taking 90M$ from Meebits in may, provoking a serious dump. Less money in the market means smaller raise from a piece and so true artists ought to put a higher price on their tokens - inflation as it is.
The exhausted market of NFT, we have now is slowly curing, while all the scammers and speculants are leaving it. We suppose, that until new year we will see real artists’ and novators’ arts, listed as NFTs and the money will be brought back to our beloved tokens.