Following a downtrend that has seen the crypto market plunge below the $1 trillion mark in value, the non-fungible tokens (NFT) market has also taken a heavy hit. According to a report by Bloomberg, the NFT Index, which tracks how NFTs are performing, dipped by 23% on Monday.
In fact, in line with the wider market crash, popular collection Bored Ape Yacht Club (BAYC) saw the prices of its NFTs dip by up to 25%. To put that into perspective, many of those BAYC NFTs were recently trading for millions of dollars each.
What’s Causing The NFT Market Crash?
General crypto market crash or the NFT market crash, there’s no doubt about what has been largely responsible for the current market conditions.
One of the main drivers of this crash has to be the global macroeconomic setup. Just a week ago, the U.S. CPI inflation data surpassed 8.6%. And in order to save the situation, experts are of the opinion that the U.S. Federal Reserve may soon announce a 75 basis points hike in interest rate. Although, there are chances that such a move could have an overall negative impact on the U.S. economy. In fact, there might be possibilities of potentially slipping into recession.
Meanwhile, it’s noteworthy that despite crashing like the broader crypto market, the NFT market crash is still lighter. Especially seeing as top NFT projects have continued to see massive demand this year amid a broader market downtrend. To this end, Bloomberg wrote:
“Investors have built substantial portfolios of NFTs in the past six months despite their low liquidity compared to fungible tokens like Bitcoin and Ether.”
BAYC Warns Holders Of A Possible Attack
In a seemingly related news, holders of Bored Apes NFTs are warned to be wary of an impending attack. Gordon Goner, the pseudonymous co-founder of Bored Ape’s parent firm Yuga Labs, took to Twitter to share the warning. He wrote in part:
“We’ve received credible information that there may soon be an attack on our social media accounts, using an inside source at @Twitter to bypass our security…”
Although, Goner claims they have contacted Twitter and security has now been beefed up. Nonetheless, he suggests that holders are better safe than sorry, and insists there will be no surprise mints.