Amidst the ongoing NFT bear market, investment firms Tiger Global and Coatue Management have made significant adjustments to the valuations of their holdings in notable NFT entities, reflecting the challenges faced within the NFT sector.
Tiger Global’s Valuation Adjustments
Reportedly, Tiger Global has notably reduced the valuation of its holdings in Bored Ape Yacht Club (BAYC) and OpenSea, with a substantial markdown of 69% for BAYC and a staggering 94% for OpenSea. This decision closely follows Tiger Global’s prior write-down of its $38 million investment in FTX, reducing it to zero.
Moreover, investors associated with Tiger Global’s Private Investment Partners 15 fund experienced an 18% paper loss by September’s end.
Furthermore, the devaluation of AI-powered email company Superhuman by 45% and privacy-centric search engine DuckDuckGo by 72% is perceived as a risk mitigation strategy to counter potential further declines in valuation.
Coatue Management’s Similar Move
Similarly, Coatue Management reduced the valuation of its investment in OpenSea by a significant 90%, downsizing its stake from an initial $120 million to $13 million amidst the challenging NFT market conditions.
NFT Market Challenges and Strategic Responses
The broader NFT market, grappling with challenges, witnessed OpenSea’s announcement of a 50% reduction in its workforce on November 3, aligning with its transition towards OpenSea 2.0. Further, this restructuring, highlighted by CEO Devin Fizner, aims to fortify technological capabilities and quality while retaining flexibility and responsiveness.
Meanwhile, JPMorgan indicated a resurgence in DeFi and NFT sectors due to growing anticipation of a U.S.-based spot Bitcoin ETF.
The report by analyst Nikolaos Panigirtzoglou exercised cautious optimism. It highlighted positive market sentiment but warned against premature excitement, further suggesting it might still be too early to ascertain a full market revival.