The emergence of Artificial Intelligence abates NFT hype as BAYC floor price tanks to 16-month lows
- Artificial Intelligence is hitting the crypto market hard, taking the spotlight from NFTs.
- Non-Fungible Token collections are observing a fall in their floor prices, with Cryptopunk's value falling to July 2022 lows.
- AI integration into smart contracts is evolving the space with the inclusion of logic in deciding to execute the contracts.
Artificial Intelligence (AI) is turning out to be the next big thing in terms of technology, replacing the fanfare that the crypto market accrued in the last couple of months. The impact of the same extends to all parts of the crypto space, including the industry favorite NFTs, which at once was all the hype in the market.
NFTs continue to lose traction
NFTs gained popularity towards the end of 2021, and by 2022 they held the most interest in the DeFi market. However, following the crypto market contagion of Q2 2022 and subsequent bankruptcies, investors began losing interest.
Consequently, floor prices of top collections, including Cryptopunks, Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC), fell to multi-month lows. Down to 47.5 ETH from 72 ETH in a month, Cryptopunks' floor price fell to July 2022 lows. Similarly, the BAYC floor price also dropped from 64 ETH to 46.7 ETH, dipping to a 16-month low.
BAYC floor price
The trading volume across marketplaces has also declined severely, and despite Blur and Opensea keeping the NFT market alive, the total trading volume has been below $300 million on a weekly basis. The declining demand is certainly the main cause behind the depreciating floor prices, as traders' weekly presence has dropped to November 2021 lows.
NFT market weekly traders
Additionally, the broader market bearishness is further reducing the value of top NFT tokens, including the likes of Apecoin (APE), LooksRare (LOOKS), and Stacks (STX). In the case of APE, the decline in floor prices added to the bearishness resulting in the altcoin falling by over 10% in the span of 48 hours to trade at $4.035.
Is AI feeding on its hype?
Although AI tokens have rallied significantly recently following the rise of ChatGPT's popularity and competitors. Nevertheless, being crypto assets, these tokens are still following the broader market cues.
In line with this bearishness, the likes of The Graph (GRT), SingularityNET (AGIX), etc., took a hit and fell by around and over 10% in the last week. The only large market cap AI tokens that noted a relatively better performance in the same duration were Render and Injective, observing a 2.61% increase and 5% decrease, respectively.
AI's impact on crypto increased after Elon Musk decreed his interest lay more in the former than the latter now.
“I used to be in crypto, but now I got interested in AI"
— Elon Musk (@elonmusk) March 3, 2023
But in general, AI usage too is stepping up, with many developers integrating emerging technology with smart contracts. Smart contracts currently read and execute the instructions as is. However, the integration of Adaptive systems resulted in the added benefit of logic in the decision-making princess of whether or not the contract should be executed.
Author
Aaryamann Shrivastava
FXStreet
Aaryamann Shrivastava is a Cryptocurrency journalist and market analyst with over 1,000 articles under his name. Graduated with an Honours in Journalism, he has been part of the crypto industry for more than a year now.
