NFT pioneer NFTZ faces liquidation
Scrapes in the crypto industry warm up to claim an additional victim following the scheduled insolvency of the pioneer of trading NFTs. NFTZ is closing down after failing to impress investors, according to Defiance’s Jablonski.
The rise and fall of ETF NFTZ
The famous Defiance Digital Revolution ETF (NFTZ) faces closure after operating in the market since December 2021. The announcement by Sylvia Jablonski, Defiance ETFs co-founder and CIO, indicated that they had set February 28 as D-day for closing and selling NFTZ. Earlier, while opening the fund’s operations in late 2021, she had predicted a bright future for NFTs indicating that they could be greater than the internet.
The fund was well-known for tracking blockchain-related establishments with the NFT index for companies such as Coinbase, online marketplace Funko, and others with a rapid involvement in NFTs.
The fund shares are in the public domain and traded on the New York Stock Exchange. The company came to the market as an ETF, and ETFs have a reputation for enabling investors to increase their portfolios without storing the actual assets. Other than NFTZ, other ETFs are facing a downfall necessitated by scandals such as the fall of FTX.
According to the press statement, the fund becomes dispensable after failure to attract assets. It also indicated that the shareholders in the fund would only be allowed to sell their shares to a specified group of brokers nearing the liquidation date. However, it is still being determined whether the market for Fund shares will be available.
Unable to survive the bear market
The fund closure comes when the digital assets hype has diminished due to the crumpling down of prices and lack of interest from investors compared to the pandemic period. Some investors would prefer to put their money into something other than decentralized finance, cryptocurrencies, and NFTs, as they did during the fund launch in 2021.
The time of crypto rallies in 2021 saw an increase in NFT holders and investors. Factors such as the dovish stance of the Federal Reserve have worked against volatile assets, necessitating a fall in prices. For example, the largest cryptocurrency, Bitcoin, is now trading at about $23,000 compared to the end of 2021, when it was at $69,000.
Bloomberg data indicate that NFTZ closed January with about $5.3 million worth of assets, an almost $9 million drop from March 2022 when it closed the month with about $14 million. Experts indicated a fall of about 83% in the sales of NFTs towards the end of 2022.
The future of the NFT market
The fall of giants has not detracted from the rise of more incredible giants in the NFT market as high-profile multinationals are warming up to the sector. A few days ago, top e-commerce retailer Amazon announced its entry into the digital asset industry this spring with a sharp focus on Web3 gaming and NFTs.
In addition, NFT players such as Bored Ape Yacht Club (BAYC) members facilitated the creation of the Dookey Dash game as they expanded in the NFT world.