BAYC Price Floor Slumps to 8-Month Low
Crypto News

BAYC Price Floor Slumps to 8-Month Low

1 хв
5 months ago

Liquidation fears could tank the NFT market even further.

BAYC Price Floor Slumps to 8-Month Low

The crypto bear market may be bad, but the NFT bear market has been brutal.

That is becoming increasingly evident by a dropping floor price of Bored Ape Yacht Club NFTs, which hit lows not seen since the start of the year. At the time of writing, the floor price is at 70 ETH, down significantly from over 150 ETH in May 2022. Coupled with ETH's dropping value in USD terms, it means that BAYC NFTs have lost over 70% of their value from all-time-highs.

The situation may become even more dire if Apes acquired by P2P lending service BenDAO are liquidated.

The NFT lending service allows holders to borrow up to 40% of an NFT's floor price value. If a loan's "health factor" drops below 1, its loan-to-value ratio exceeds 40%, and the loan is not repaid in time, the NFT is placed in a 48-hour auction.

According to Twitter user Cirrus, a significant amount of Apes are currently facing liquidation risk, which could prompt a liquidation cascade for the wider NFT market.

It remains to be seen what would happen if the floor price really were to drop even further. According to BenDAO documentation, "the platform only has a temporary floating loss and no actual losses." This does not address potential concerns over a liquidation cascade in the market.

The NFT market has been in a brutal bear market, with trading volume down over 80%, according to information by The Block.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap. CoinMarketCap is not responsible for the success or authenticity of any project, we aim to act as a neutral informational resource for end-users.
3 people liked this article