US technology investment firm Coatue Management has marked down the value of its stake in non-fungible token (NFT) platform OpenSea by 90%.
On November 7, The Information reported on a document it reviewed that showed Coatue had reduced its investment from $120 million to $13 million – meaning OpenSea was worth $1 on paper .4 billion US dollars fell.
Coatue also reduced its investment in Web3 payments provider MoonPay by 90%.
In January 2022, OpenSea raised $300 million in a Series C round led by crypto venture capital firm Paradigm and Coatue. The outsized investment valued the NFT platform at $13.3 billion.
After a persistent bear market and a years-long slump in NFT trading activity, OpenSea announced a 50% workforce reduction on November 3 as part of its plan to relaunch as OpenSea 2.0.
1/9
OpenSea is making some big changes today to focus on the next version of our product.— Devin Finzer (dfinzer.eth) (@dfinzer) November 3, 2023
OpenSea CEO Devin Fizner said the new version of the platform will focus on updating its technology and increasing its speed and quality. For Fizner, a smaller team will allow the platform to remain “flexible and attentive.”
Related: Elon Musk criticizes NFTs but ultimately argues for Bitcoin Ordinals
In August, OpenSea faced criticism after it announced it would discontinue its operator filter, a feature that allowed developers to blacklist marketplaces that do not enforce royalties.
Coatue’s markdown comes amid a collapse in NFT trading volumes. The sector peaked in 2021, recording over $14 billion in sales during the year. Since then, the popularity of NFTs has been on the decline, with total trading volume down 80% since March 2022.
NFT trading volume increased slightly in October, indicating a possible trend reversal. Source: DappRadar
A November 3 report from crypto data firm DappRadar found that the NFT market posted its first month of gains in over a year, posting a month-over-month increase of $99 million in October.
Magazine: X Hall of Flame: Simp DAO Queen Irene Zhao explains why good memes are harder than trading