The volatility in the cryptocurrency markets is making it extremely difficult for companies in this field. Everything can easily be turned upside down. OpenSea is a prime example of this. In 2021, the platform, which accounted for over 90% of the NFT transaction volume, had thousands of millionaire users. However, the bear markets have wreaked havoc on NFTs, leading to bitter consequences.
OpenSea News
Devin Finzer, co-founder and CEO of OpenSea, wrote in a recent statement that the company is trying to create a new foundation to promote innovation. For this purpose, the team needed to significantly downsize. While Devin described it as transitioning to a smaller team with direct connections to users, almost all companies operating in areas that have lost their enthusiasm in bear markets have done the same.
“Therefore, today we bid farewell to some of our OpenSea team members. We are making these changes with our community in mind. While rebuilding, we will continue to support our existing products and iteratively test OpenSea 2.0 publicly.”
According to a company spokesperson, employees will receive an additional four months of severance pay upon leaving. The new management structure minimized the number of mid-level managers and created a flatter management hierarchy.
OpenSea and the Future of NFTs
With the contraction of the NFT market and the increasing market share of alternatives like Blur, things have become even more challenging for OpenSea. The platform, which held over 90% of the market share in 2021, saw its share drop to 73% by October 2022. As of November 3, the platform’s market share declined to 18%. The rapid devaluation of popular million-dollar collections and the rise of competitors have inflicted difficult wounds in this field.
Investors have witnessed collections they bought for hundreds of thousands of dollars plummeting to thousands of dollars. The SEC has even initiated securities sales registration lawsuits against some collections. This situation shows us that “prices inflated by excessive demand” suffer fatal blows during bear seasons. Meme coins can also be cited as examples. As confirmed by the current situation, NFTs, like meme coins, are assets that are prone to go to zero without strong demand. Therefore, during bull seasons, we can expect at least some NFTs to experience massive rallies, just like meme coins.
In the world of crypto, the value given by investors and excessive demand determine the price of virtual assets. NFTs, like meme coins, have stood out with their potential to generate excessive demand, and they did so in 2021. The next bull season will be a crucial testing period for the NFT market.
