First Mover Asia: Pine Wants to Test the Liquidity of the NFT Market; Cryptos Are Well-Red

Bitcoin was recently trading at about $28,900, within its range the past few days following the collapse of the terraUSD (UST) stablecoin and the LUNA token that supports it, but down 5% over the past 24 hours. Ether, the second-largest cryptocurrency by market capitalization, was off more than 8% over the same period after dropping below $2,000. Among the rest of the declining and the decrepit, SOL, AVAX, DOT, MATIC, SAND and MANA were all recently down at least 12%.

“The market is continuing its current bearish trajectory,” Autonomy CEO James Key wrote to CoinDesk, although he noted that crypto wallet addresses with small amounts of BTC had climbed past 10 million for the first time. Still, he noted that “institutions…view crypto as an exotic risky asset, and as we drop into a recession, those assets are the first to be sold by those players – it was always the down side of inviting them into the crypto space.”

Equity markets had a more than forgettable day as all sectors dropped amid escalating investor fears of recession and bad news from the retail sector. The tech-focused Nasdaq plummeted 4.7%, while the S&P 500 fell 4%, their worst percentage decreases in two years. The Dow Jones Industrial Average plunged more than 1,100 points, a 3.6% drop that was its worst closing mark since mid-2021.

The retail sector has played a big role in the most recent U.S. economic recovery, and even last week, the sector seemed buoyant following a strong consumer spending report. But on Tuesday, retail giant Walmart said that its profit dropped 25% year-on-year. Target followed Wednesday morning with its own disappointing news: sales growing just 3.3% compared to a 22% rise for the same quarter a year ago.

Bitcoin, which has struggled to hold $30,000 following the UST debacle, and the rest of the digital assets industry was swept up in the latest events. On Wednesday, London-based miner Argo Blockchain reported first quarter net income of $2.1 million, a 90% falloff from the same period the previous year.

While remaining highly bullish on the outlook for crypto, Novogratz said those hoping for a “V” bottom in the market are likely to be disappointed. “It will take restructuring, a redemption cycle, consolidation, and renewed confidence in crypto. Crypto moves in cycles, and we just witnessed a big one.”

“A year ago, I wanted to buy a Meebit but I did not have spare ETH in my wallet. Therefore, I sold my Bored Ape Yacht Club (BAYC) at 7 ETH to execute the trade. I wanted to buy back another BAYC but I never did and I still have my Meebit right now. In hindsight I wish I had access to a platform like Pine,” said Alex Ho, Pine’s co-founder, in a release, illustrating a use case for the platform. “I decided to build out Pine so that NFT owners like myself are able to unlock liquidity without having to sell their NFTs.”

Nansen’s data shows there’s still weekly higher volume than in most weeks of 2021, and in the last 30 days there has been a 58% increase in volume from 941,000 ether spent per month to 1.49 million.

For Pine, expensive JPEGs – with all their questions about market volatility and liquidity – are just the start. The founders envision their asset-backed financing protocol will eventually move beyond this market to other verticals at the hands of specialized teams.

In theory, NFTs can be used to represent any sort of document of value like a house’s title, or a security agreement to finance investment in a company like a SAFT. After all, similar vehicles exist in the traditional finance world, and there’s no reason the same can’t happen for crypto – if the industry can move on from JPEGs of bored apes.

A decisive break below $27,000 could yield further downside targets for BTC, initially toward $17,823. Further, BTC’s downward sloping 50-day moving average indicates persistent trend weakness, which could keep sellers active.