NFT Blue Chips Rally as Prices Climb Despite Thinning Market Activity

• With 201 sales and approximately 1,000 ETH in volume over the previous seven days, Pudgy Penguins has seen a floor rise above 5 ETH, a 20% increase from last week.
• Data from CryptoSlam shows that worldwide sales of NFTs declined to around $175 million in April from $304 million in February.

Those who are just concerned with price increases may regard the market for non-fungible tokens (NFTs) as flourishing. But the data as a whole shows something else.

Pudgy Penguins and Bored Ape Yacht Club are at the front of the pack. In the last few weeks, both their floor pricing (the lowest potential purchase cost) and tokens have seen rises of double digits. The rebound is still taking place, but with somewhat fewer purchasers.

With 201 sales and approximately 1,000 ETH in volume over the previous seven days, Pudgy Penguins has seen a floor rise above 5 ETH, a 20% increase from last week. Following a precipitous decline, BAYC’s floor has recovered well, rising 81% in the last 30 days.

Declining Sales Volume

One key measure to watch is the floor pricing. In a collection of NFTs, the floor price is the item with the lowest selling price at the moment. Assuming the market price of a Pudgy Penguin is 5.38 ether (ETH), it will serve as the collection’s floor. If the floor is going higher, it usually signifies that people are prepared to pay more to get in. Typically, holders are making a mad dash for the escape as the floor falls.

However, a closer look at the market’s structure reveals that wide participation is actually decreasing, which contradicts the headline price rises. Data from CryptoSlam shows that worldwide sales of NFTs declined to around $175 million in April from $304 million in February. Additionally, the number of transactions and active users also fell by about half.

In the meantime, average selling prices increased from $30.60 in March to $67.38 in April, more than doubling from one month to the next. Both pieces of information show the same phenomena, but from different perspectives. There has been no general upturn in demand for blue chip collections, but rather a limited group of investors is engaging in high-value deals.

The demand quality differs even across blue chips. A indicator of consistent activity is the relatively high transaction counts and growing prices seen at Pudgy Penguins. In comparison, collections such as CryptoPunks have had comparable weekly activity with far fewer deals, suggesting that a few of huge transactions are significantly influencing pricing.

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