The crypto and NFT markets have been impacted by the current liquidity crisis and alleged mismanagement problems that the FTX is presently experiencing.
News in a Glimpse:
- A collection of highly sought-after NFTs is owned by Alameda Research, the FTX’s financial sibling, and is reportedly worth millions of dollars.
- The NFT collection consists of 31 rare NFT from the Bored Ape Yacht Club collection in addition to 26 Otherdeed for Otherside tokens.
- The impact of the aforementioned problem spread to the NFT market, where Bored Ape Yacht Club is allegedly falling as a result of owners selling their NFT in a panic and a drop in the price of ETH.
- In addition to the current market environment, BendDAO is another factor that is thought to have had an impact on the price of the blue-chip NFT collection.
Sam Bankman-FTX Fried’s is in danger of failing after many potential investors withdrew from an acquisition plan after reading the company’s financial reports. A collection of highly prized NFTs owned by Alameda Research, which is said to be worth millions of dollars, is one possible source of funding for the company, according to a report.
The aforementioned NFT collection includes 26 Otherdeed for Otherside tokens, and 31 rare NFT from the prestigious Bored Ape Yacht Club collection. Yuga Labs, a renowned NFT powerhouse, is the creator of both of the aforementioned NFT collections.
The $450 million funding round that Yuga Labs received last March was led by FTX Ventures, the $2 billion venture capital arm of the crypto empire. According to a recent report by a representative of the FTX, Alameda Research, the financial sibling of the FTX, was in charge of the wallet and had previously traded bored apes as part of its NFT trading strategy.
Nikolai Yakovenko, the creator of the NFT valuation website DeepNFTValue, claims that the value of the aforementioned blue-chip NFT collection is estimated to be between 4,000 and 5,000 ETH, which appeared to be sufficient to support FTX.
Three of the Bored Apes with gold fur, a trait with a 1,000 ETH floor price, are among the most uncommon collectibles in Alameda Research’s wallet. Despite the fact that the last Bored Ape with gold fur was only sold for 800 ETH in the event of liquidation, a professional forecasts that it could sell for as little as 500 ETH given the current market circumstances.
The wallet of Alameda Research also contains four “trippy fur” Bored Apes, which, according to the OpenSea, have a floor price of 599 ETH. The said wallet’s most recent Bored Ape activity, according to the records, occurred three months ago.
Effects of FTX Being on the Verge of Collapse
This week’s top news stories focused on the liquidity crisis at FTX and the alleged mismanagement of customer funds, which has had a significant impact on cryptocurrency prices. The aforementioned effect also extends to the NFT market, where the value of the well-known Ethereum project and blue-chip NFT Bored Ape Yacht Club is allegedly falling as a result of panicked NFT sales by owners and a decline in ETH price.
The cheapest Bored Ape Yacht Club NFT on the market as of this writing is priced at 57.5 ETH, which is roughly $76,40. This represents a 7% decrease in price over the course of a day when expressed in ETH, but a 24% decrease when expressed in USD due to the 13% decline in the value of ETH. According to the report, the price of the Bored Ape fell by 82% since peaking in April at 152 ETH, or almost half a million dollars.
Other Factors Affecting the Price Fall
Numerous factors that might have had an impact on or influenced the price of the high-end NFT collection Bored Ape have been noted. One of them is the most obvious one; it is the current state of the cryptocurrency market, which has gotten worse over the past few days as a result of the FTX problem. This situation may have caused some investors to sell their “blue chip” NFT assets during the downturn. On-chain evidence has been used to support this assertion.
According to data collected by Flipside Crypto and shared by the Proof Director of Research, Bored Ape Punk9059 was observed to have a notable increase in trades on the top marketplace OpenSea last Wednesday using warped Ethereum rather than the standard one. It is well known that this week saw a 50% increase in the share price of traded Ethereum.
This is important because warped Ethereum is needed to bid on an NFT in a marketplace like OpenSea, which means that as more warped Ethereum are created, more bids will be accepted for the NFT owner’s assets. Since the bids are typically below an NFT’s market value, it can be assumed that the owner of the NFT is taking lowball offers in order to quickly liquidate their NFTs in the midst of the market chaos.
The decline in the cryptocurrency market, particularly as it relates to the lending protocol BendDAO, which allowed users to obtain cryptocurrency loans by pledging valuable NFTs as collateral, is another factor that might have had an impact on the price of the Bord Ape NFT collection. In the interim, it appears that BendDAO has been auctioning 14 Bored Ape NFTs from liquidated loans. These NFTs currently have a bid that is below their market value, indicating a soft demand for the assets.