"What's wrong with the NFT market? " 1. The NFT market has been sluggish recently, with both volume and price falling. This is something that everyone can relate to. It's a pity, silly brother, it seems that the analysts of various funds have not made it clear. Most analysts just pile up data without really understanding the market. Sha Ge can only write a post to express his views on the NFT market. That's not right, everyone is welcome to make bricks.

2. Since February, both price and volume have fallen. The above data: the trading volume dropped from 36,000 ETH per day to 10,000 ETH; the blue chip index fell from more than 9,000 to 7,500. During this period, all the NFT bigwigs were eclipsed.

3. The number of transactions decreased, and the number of active addresses decreased significantly. Active addresses are down 90% from February. The number of transactions fell by about 80% from the previous month. Is it miserable? awful.

4. What is even more frightening is that there are no new users of NFT. Since April last year, the proportion of new users has gradually declined. The small proportion of new users means that there is not much incremental capital. It can be seen that the NFT market is indeed in a bear market and has not come out at all. How to explain all this? This is a matter of economic interpretation.

5. [Blur's impact on the NFT market] Some analysts said that Tieshun's Blur has harmed NFT. One is that NFT cannot withstand high-frequency transactions. Silly brother disagrees. In Sha Ge’s view, the increase in the frequency of NFT transactions is because the friction cost of transactions has been reduced. NFT transaction friction costs are reduced and transactions are smoother, which has slight benefits to asset prices. In addition, the current NFT trading volume has dropped significantly, and the price of NFT has not stabilized.

6. [Blur's impact on the NFT market] Second, it means that Bur popularized NFT and broke away from the niche circle, which caused the price to drop. This logic is also untenable. Because NFT has been open and transparent on the chain since its birth, in the era of Opensea, everyone can watch the transaction.

7. [Blur's impact on the NFT market] The third is that the huge Liquidity coming from Blur defeated NFT. This logic does not stand up to scrutiny. Pushing this Liquidity to the end is an ordinary homogeneous token. A large number of homogeneous tokens are dancing in the market, so how can NFT with less Liquidity fail. Not to mention, Liquidity injections are good for asset prices.

8. [ETH rises, so NFT falls] Some analysts in the market said that because ETH has risen, NFT can't hold it anymore. Ask them why, they faltered and said that NFT investors look at the U standard, not the currency standard. A stupid question, and of course a stupid answer. Let's look at the data, the price of ETH and the price of NFT are not completely negatively correlated. Analysts who blame NFT's decline on ETH rise are not even nerds.

9. [Why did some NFTs rise? 】 In such a sluggish market, even Yuga's transcendent operation ability can't maintain the price? Why was Azuki able to stabilize its rise? It is tautology to say that demand is greater than supply. Say PR is good, so how to explain that the cooperation between Yuga and Gucci cannot maintain the currency price? Sha Ge believes that the important factors that cannot be ignored are the control rate and trading funds. But it is difficult to have external data on this point.

10. [NFT and the market have different rhythms] In November 21, the market peaked. As for NFT, it peaked in April 22. There is a delay of 5 months. From June to July 22, the market was rubbing against the bottom. From June to mid-July 22, NFT rebounded slightly again. What does this mean? It shows that the NFT market has its own independent rhythm, which is out of sync with the broader market.

11. [NFT and the market have different rhythms] In the second half of last year, both NFT and the broader market fluctuated and fell, and no one felt that the NFT market was sick. Sha Ge believes that it is still in the NFT bear market, and the decline is normal. It's not because the NFT market is sick, it's because the rhythm of the NFT market lags behind the broader market. If the rhythm is different, how to explain that NFT has fallen more sharply than the market?

12. [Why NFT fell more sharply than the market] Because NFT requires less Liquidity to maintain the same market value than homogeneous tokens. Why do everyone in the bear market like to do nft projects? Because money is not enough. NFT projects can blow out a larger market value with less capital. In other words, the market value of nft is more virtual than that of homogeneous tokens.

13. [Why NFT fell more sharply than the market] The characteristics of NFT itself: NFT can rise far beyond the market in a bull market, and shrink far beyond the market in a bear market. Today's NFT market is sluggish, and Idiot made a prediction in August last year. In other words, the NFT market is not sick. It's just that the cycle is different from the rhythm of the market. And because of the characteristics of NFT assets, the bear market fell even deeper.

14. [Looking at BLUR in the context of NFT bear market] 1. Blur's trading mechanism dilutes the uniqueness of NF.T's single chip and weakens the premium. This will lead to a weak decline in the NF.T market. 2. Blur's trading mechanism, in a falling market, each unit's price drop corresponds to more trading volume. This makes it more costly for the project side to protect the market, and causes many blue-chip projects to start to fail On the whole, Sha Ge believes that this makes the bear market of NFT more bearish.

15. 【Will NFT never recover? 】 Since it is a bear market, NFT generally has two prospects. One is that it keeps falling, never recovering from a setback, and has since disappeared. The second is to rebound from the bottom and make a comeback. The silly brother speculates that the probability of NFT dying out is very low. First of all, the development of the online world has led to the need for digital artworks as a subdivided wealth storehouse. At present, NFT is the best carrier.

16. 【Will NFT never recover? 】 Secondly, NFT has formed a huge ecology, including developers, investors, game studios and Metaverse. This ecology has not yet died out, and when the bull market comes, it will have the power to fight. Third, NFT represents an innovative form of ownership expression, which is an indelible innovation. Finally, NFT has created a new form of transaction in the circle, which has great charm.

17. 【When will NFT bottom out】 If we think that NFT is back up again. Then the most important thing is to find out the big cycle of NFT. The last round of the big cycle of the bull market started at the end of 2018 and the beginning of 2019, and the bull market ended at the end of 21. The NFT was launched in early 21 and ended in April 22. Unfortunately, after the NFT market has grown into a large scale, it has experienced only one cycle, and the bear market is not over yet. The earlier nft market size is too small for reference.

18. 【When will NFT bottom out】 Sha Ge believes that the NFT market is estimated to lag the market by 1-2 years. If ETH bottoms out in June 22, the NFT market will bottom out around the end of 23. Moreover, Sha Ge believes that if the market is on fire before the end of the year, the funds will overflow to NFT, which will lead to the early start of the NFT market. This is a helpless estimate, but at least it will have a vague impact on everyone. Idiots will keep an eye on the marginal changes in the specific market.

19. [Selection of NFT] Here, silly brother will not talk about specific projects, but talk about the big principles. I am optimistic about the aesthetics of young people in the United States, but not in Japanese aesthetics. European and American culture is still the mainstream of web3, and everyone will pay for the taste of the United States. The reason why I am not optimistic about the Japanese system is because Japan is in decline and is moving rapidly down the chain of contempt. When the country declines, artistic taste is despised.

20. [NFT Selection] Nft is divided into utility NFT and non-utility NFT. utility nft, similar to lock-up nft mining. The price of utility NFT will be more stable and will also bring a ceiling. Non-utility nft is miserable in a bear market and is useless. In the bull market, because there is no discounted cash flow constraint of the utility, the value can skyrocket. The idiot likes targets that are demoted to nothing in a bear market and fly into the clouds in a bull market.

21. 【The old hunter is playing】 The NFT market at the moment has caused countless people's hearts to bleed. But for the old hunter, it was just a little interesting. The old hunter leisurely took out his gun and mounted the scope, ready to catch the rare delicacy.

PS. Some pictures in this article are quoted: dune.com/0xdatawolf/nft-busine...