Key OpenSea Investor Cuts Platform Valuation By 75% As Global NFT Sales Plunge ⋆ ZyCrypto
The global NFT market has seen a significant slowdown recently, with various platforms and investors feeling the impact. As the hype surrounding NFTs died down last year, the market experienced a correction, leading to a decline in trading volume and valuations.
OpenSea, one of the largest NFT marketplaces, has been particularly hard hit, with its valuation now facing a significant cut by one of its most prominent investors, Tiger Global. According to a recent report by The Information, Tiger Global, a $13 billion technology-focused venture fund, recently disclosed that its equity in OpenSea has fallen from $126.8 million to $30.2 million, representing a 76% move. The firm became one of the largest investors in OpenSea when the NFT platform raised $300 million in a Series C round earlier last year.
Last December, the firm reported a paper loss of 20%, with over half of that withdrawal coming from its crypto-related investments. The New York-based firm established its venture fund in 2021 before investing heavily in blue-chip crypto startups. Some other notable firms that the firm had allegedly dabbled with include Bored Ape Yacht Club creator Yuga Labs, MoonPay and FTX, which went under last November, completely wiping out the firm’s investment.
NFT’s thoughts along with cryptocurrencies
Despite the number of NFT projects growing to record highs over the past year, the overall revenue of the industry has been declining as crypto prices plunge. Over the past year or so, most cryptocurrencies, including Bitcoin and Ether, have fallen by over 70%, a scenario that could have triggered a loss of interest in NTFs.
In its recent report, Tiger Global valued OpenSea at just $3 billion, despite the popular NFT marketplace reaching a value of $13.3 billion at the height of the NFT craze last year. This fall in value has been largely attributed to the decline in NFT sales plummeting and increased competition from rival platforms such as Blur.
But OpenSea is not the only victim of the NFT market downturn. Other platforms, including Rarible, have also seen a decline in trading volume and valuations. Meanwhile, high-profile NFT sales have slowed, with many artists and collectors holding back as the market cools.
There is still hope
That said, despite the downturn, there are still reasons to be optimistic about the future of NFTs. According to a recent report from DAPP Radar, despite a disappointing end to 2022, NFTs had a strong Q1 2023, with a 137.04% increase in trading volume to $4.7 billion, the highest since Q2 2022.
This renewed growth has been fueled by the launch of new marketplaces and protocols such as NFTFi, which seeks to bridge the DeFi and NFT ecosystems by introducing different approaches to unlocking liquidity for NFTs.
