There hasn’t been much good news for from Coinbase (CURRENCY 0.69%) non-fungible token platform, Coinbase NFT, lately. Non-fungible tokens (NFT) are the digital assets on a blockchain that are often represented by images; examples include Bored Ape Yacht Club or CryptoPunks. According to Dune Analytics, Coinbase, one of the leading cryptocurrency exchanges, has sold just $2.95 million worth of NFTs on its platform since its launch on April 20. That’s a paltry sum compared to the $6 billion traded on OpenSea, the industry-leading NFT marketplace.
To make matters worse, NFT trading volume is down about 75% in dollar terms for NFTs on the Ethereum blockchain since mid-April. If NFTs are in decline and Coinbase is unable to participate, what would it do? How about making a call to actor Bill Murray and the image and culture website theCHIVE?
Bill Murray’s Coinbase NFT
Today, Bill Murray will release, or release, 1,000 NFTs in a collection created with CHIVE and branding agency Project Venkman. There are 100 NFT stories, each with 10 color mods of each image that make up the collection. The drop will be auctioned off with a real-life painting and promises.”Once in life experiences with the man, the myth, the legend”.
The NFT release is one of four upcoming, including one involving NBA star Damian Lillard, a feature by graphic designer Jeff Staple, and a “Historical Figures” collection that includes Athena, Queen Victoria, and others.
In general, the idea is to bring celebrity exposure to Coinbase NFT. But the challenge is that today’s NFT buyers are probably already used to trading on one of the existing platforms, so moving from a marketplace like OpenSea to Coinbase NFT is not that appealing.
The NFT problem
Maybe it was just bad timing, but Coinbase NFT released at a time when NFT sales were falling like a rock. You can see below that OpenSea volume is down about 75% since mid-May and Coinbase NFT has been unable to capture more than 1% of transaction volume for more than a day or two.
Is this about Coinbase entering a declining market and having no luck attracting existing users? Wouldn’t Coinbase NFT have improved if the overall NFT market was growing?
It is impossible to know what caused Coinbase NFT to launch poorly, but it is safe to say that it is not gaining market share today. Could celebrities change that? I’m not so sure.
An eye on the future?
I have to wonder if NFT crashes like this foreshadow things to come for Coinbase NFT. We know from Coinbase’s Q1 2022 conference call that the company has higher plans said there are “Features we’re planning to add, the ability for people to make NFTs, mint their own NFT tokens, there are tokenized communities we want to support, and even the option to purchase a piece directly with your credit card or whatever funds you currently have.” in your main Coinbase account.”
The market is now showing more NFTs priced in US dollars, even if a purchase is to be made in Ethereum. This fall would also be testing the characteristics of the auction. We could be seeing a high-profile test of minting tools, or tools that create NFTs on the blockchain, coming to market.
Coinbase and the long game of NFTs
I don’t think Coinbase’s long game is just to be competitive with OpenSea. Its growth potential lies in making NFTs easier to create, buy, and own, which is where integration with the Coinbase app, Coinbase Wallet, and Coinbase Pay could make it easier to onboard the next generation of users.
This is a very long game that Coinbase NFT is playing, but it needs to prove that its tools (minting and auction) work and attract buyers to the platform. Bill Murray is a name that could do both, but it’s an uphill battle against entrenched business at OpenSea.
Travis Hoium has positions in Coinbase Global, Inc. and Ethereum. The Motley Fool has positions and recommends Coinbase Global, Inc. and Ethereum. The Motley Fool has a disclosure policy.