Coinbase – one of the largest and most popular crypto exchanges in the world – opened its new non-fungible token (NFT) division to dismal results. The department has been in beta mode since late April and finally opened on May 4, yet experienced little traction.
The NFT Coinbase Market Isn’t Doing Well
Many are wondering if this is a sign that the NFT market has reached its peak. The NFT space has grown exponentially in recent years and now boasts a market cap exceeding $10 billion. There are many traders out there willing to pay hundreds of thousands of dollars for the several tokens being offered in the NFT world, yet there are many people out there who question if these prices are justified and if the NFT space is just another bubble set on bursting soon.
Coinbase only witnessed around 110 transactions during the first few hours of NFT trading. This amounted to less than $60,000 in total sales, a low number for a company this large. Garry Krugljakow – founder and CEO of GOGO Protocol – says that the world of NFTs is not shrinking and offered his take on what may have gone wrong. He said:
Volumes on the big NFT platforms, like Open Sea and Magic Eden, are soaring also thanks to integrations with layer-2 chains such as Polygon, which have drastically brought down transaction fees. We are still in the early innings of this technology, and it’s clear that more people are buying from a wide variety of NFT collections and in greater numbers.
While he doesn’t feel the world of NFTs is suffering in any way, he did comment that there may be a consolidation happening in which users are purchasing what are known as blue-chip projects. He said:
So, they might be receiving the bulk of the volume. I just don’t think the apparent flop of the Coinbase NFT platform is a good example of gauging the health of the NFT market. Its competitors already have a huge advantage in being first movers, after all.
One of the big problems facing Coinbase is that despite its growing innovation and its many attempts to branch into different sectors of the crypto space, several people still view the company as a traditional trading exchange and thus don’t think of it unless they’re in the mood to purchase or trade assets.
Does the Exchange Ask for Too Much Data?
Toni Caradonna – CTO of Cross the Ages – says that Coinbase also requires heavy amounts of information from its customers, which may be turning them off given that crypto is built on the notions of decentralization and privacy. He commented:
When you use Coinbase, all your data is captured… I should also note that FTX launched an NFT platform a while back, and it also did not do well.