Coatue Management Slashes Stake in OpenSea Amid NFT Trading Slump
Summary:
U.S. investment company Coatue Management has significantly reduced the value of its shares in OpenSea, an NFT platform, by 90%. This slashing of its $120 million investment to $13 million implies a drastic drop in OpenSea's valuation to $1.4 billion. Simultaneously, Coatue's investment in MoonPay, a Web3 payment solutions provider, saw a similar markdown. This follows a steady decrease in overall NFT trading volumes, falling by an enormous 80% since March 2022 even while October witnessed a slight resurgence.
U.S. technology investment company, Coatue Management, has significantly depreciated the value of its share in OpenSea, a renowned non-fungible token (NFT) platform, by a staggering 90%. The Information revealed this adjustment based on a document it examined on November 7, indicating that Coatue's investment shrunk from a whopping $120 million to merely $13 million. This suggests that OpenSea's valuation has reduced to a paper estimation of $1.4 billion. Similarly, Coatue also devalued its investment in MoonPay, a Web3 payment provider, by 90%. In January 2022, OpenSea successfully garnered $300 million in a Series C funding round orchestrated by Paradigm, a cryptocurrency venture capital company, and Coatue, making the NFT platform worth $13.3 billion.
Burdened by the persistent bear market and a year's worth of reduced NFT trading, OpenSea declared a staff cutback of 50% on Nov. 3. This move aims to facilitate its revamp into OpenSea 2.0.1/9. Devin Fizner, OpenSea's CEO, affirmed the new version of the platform will prioritize technological enhancements, speed and quality improvements. Fizner believes that a slender team will ensure the platform remains "prompt and vigilant."
In August, OpenSea faced backlash after it disclosed that it would be discontinuing its operator filter. This feature enabled creators to blacklist marketplaces that did not enforce royalties. The markdown by Coatue coincides with a downturn in NFT trading volumes. The sector reached its zenith in 2021, noting more than $14 billion in sales throughout the year. Nevertheless, the allure of NFTs has been waning, with overall trading volumes falling by an enormous 80% since March 2022.
However, a slight increase in NFT trading volumes was observed in October, suggesting a potential switch in trend. A report from DappRadar, a cryptocurrency data company, on Nov. 3 revealed that the NFT market saw its first monthly increase in over a year, recording a rise of $99 million month-over-month in October.
Published At
11/8/2023 5:50:59 AM
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