The digital collectibles market has experienced an astonishing collapse in value, with the Bored Ape Yacht Club (BAYC) NFT, which was once valued at $550,000, now seeing a sharp decline in market capitalization.

From the perspective of market evolution, the situation of BAYC can be regarded as a perfect epitome of the digital asset bubble:

Three years ago, a BAYC NFT was worth as much as a house; now, its value has dropped to the point where it can only buy a few bags of snacks. Currently, the floor price of BAYC has fallen to about 0.5 Ether (321 USD).

This collapse process can be attributed to five main causes:

First, there was the irrational bubble in 2021 when Bitcoin surged to a peak of $69,000, and various celebrities showcased their digital ape collectibles, treating Twitter avatars as a symbol of identity.

Secondly, the bear market in 2022 cruelly halved the price of Bitcoin by 75%, and the NFT trading volume also significantly shrank.

Thirdly, the extravagant promises made by the project party have almost all fallen through - the luxurious yacht party that was once promoted has ultimately turned into just an online chat group, and the so-called metaverse land project has also turned into a digital wasteland.

Fourth, the market saturation is extremely high. In addition to the original 10,000 BAYC, over 100,000 various imitation works have emerged in the market, resulting in a complete loss of scarcity.

In the end, most early investors have cashed out, leaving the later participants to bear the losses.

This event serves as a profound lesson for investors: spending $550,000 on a digital image is not as wise as purchasing tangible assets. At least the latter can provide real value, rather than just existing as a virtual proof of ownership on the blockchain.