The sell-off is reflective of the steep declines in NFT/blockchain gaming sales volumes. The stats have been known for a while, but now the big media outlets are publishing bearish stories.
NFT sales fell to a daily average of about 19,000 in May, a 92% decline from a peak of about 225,000 in September.
You only need to take a look at the flagship gaming/metaverse tokens (Axie, SandBox, Decentraland etc down 60-80%) to appreciate that interest has cooled. Compounding matters, speculators sold NFTs/tokens to raise funds for the BAYC land sale. Even though the 1 day land sale generated a record US$300m, over US$160m was wasted in gas fees of unsuccessful bidders. Sentiment has soured as the proportion of bag holders increases.
It's a case of riding out the storm, which could last for several months, although a lot of people are now starting to realise that the majority of NFTs were never investment grade in the first place (in-game NFTs dont fall into this category as they provide utility).
I'm not sure that the buy-back is a smart strategy. It was actually wasteful to buy-back above and around the cap raise price as there's no case for claiming that they've been purchased at a steep discount). The $4-5m used so far could have been better utilised to acquire more companies, especially as loss-making private companies can now be snapped up at a big discount.
