In what seems to be yet another setback for the NFT market, and more specifically Opensea, one of its investors has recently devalued its investment from over $120 million to a mere $13 million. This significant markdown serves as a stark testament to the fragility and uncertainty surrounding the NFT sector.
Since its peak in 2021, the NFT market has experienced a steady decline. This downward trend is characterized by diminishing market capitalizations and plummeting prices of NFTs, particularly prominent collections like CryptoPunks and Bored Apes. Furthermore, the influx of new NFT collections entering the market has noticeably decreased as the industry continues its descent, leaving participants anxiously hoping for 8eventual stabilization and a subsequent bullish resurgence.
Coatue Management, a major investor in OpenSea, has significantly decreased the valuation of its investment in the company. The value of its stake in the non-fungible token (NFT) platform has dropped from $120 million to $13 million, representing a 90% decrease. According to a report from The Information, this adjustment implies that OpenSea’s current on-paper valuation is now $1.4 billion.
Additionally, Coatue has also reduced the value of its investment in MoonPay, a Web3 payment provider, by 90%.
In January 2022, OpenSea raised $300 million in a Series C funding round, with participation from Paradigm and Coatue, which valued the company at $13.3 billion.
OpenSea, in response to the prolonged bear market and a decline in NFT trading activity, recently announced a restructuring plan that involves laying off 50% of its staff. This strategic move is aimed at preparing for the launch of OpenSea 2.0, a new version of the platform designed to enhance speed and quality through technological upgrades, as stated by OpenSea CEO Devin Finzer. By operating with a smaller team, OpenSea aims to become more agile and responsive to user needs.
In August, OpenSea received criticism for retiring its operator filter feature, which allowed creators to exclude non-royalty-enforcing marketplaces from displaying their works.
The markdown from Coatue indicates a decline in NFT trading volumes. Although the NFT sector experienced its peak in 2021, with sales exceeding $14 billion for the year, its popularity has been diminishing since March 2022, resulting in an overall 80% drop in trading volumes.
According to a report from DappRadar on November 4th, the NFT market saw its first month of growth in over a year during October, with a significant increase of $99 million compared to the previous month.
However, despite the recovery in the cryptocurrency market, NFT sales have not experienced a similar resurgence. Market tracker data reveals that weekly NFT sales have plummeted from 176,000 to approximately 23,000 since the beginning of the year. Moreover, the weekly sales value has decreased from $118 million to $62 million.
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