- Coatue Management marked down the value of its stake in OpenSea by 90%, implying OpenSea’s valuation has dropped from $13B to below $1.4B.
- Coatue originally invested $120M for a stake when NFTs were booming in 2021. Now the stake is valued at just $13M, showing markdowns by crypto investors.
- OpenSea hit a peak valuation of $13.3B in January 2022 but trading volume has since declined over 90% as the NFT market crashed. OpenSea faces challenges in the crypto winter despite remaining the top NFT marketplace.
Coatue Management, a major investor in OpenSea, has marked down the value of its stake in the NFT marketplace by 90%. This implies OpenSea’s valuation has dropped below $1.4 billion from over $13 billion last year.
Coatue’s Stake in OpenSea Plummets
Coatue originally invested $120 million for a stake in OpenSea in early 2021, when the NFT market was booming. As of Q2 2022, Coatue has reduced the value of this stake to just $13 million on its books. This massive markdown shows how venture capital investors who bet big on crypto and NFTs during the market’s peak are now writing down those investments.
OpenSea’s Meteoric Rise and Fall
Just last January, OpenSea hit a peak valuation of $13.3 billion after a funding round led by Coatue and Paradigm. At the time, OpenSea dominated the NFT market and looked poised for massive growth as crypto and NFTs gained mainstream traction.
But as crypto prices collapsed in 2022, so did demand for NFTs. Trading volume on OpenSea has declined over 90% from its peak, and the company has struggled to find a path to profitability. OpenSea’s crash from a $13 billion darling to a low single-digit billion dollar valuation exemplifies the boom and bust of the NFT cycle.
The Outlook for OpenSea and Web3
While OpenSea faces challenges, it still remains the leading NFT marketplace. But its frothy valuation from last year appears unsustainable, forcing investors like Coatue to mark down their stakes. As the crypto winter continues, more markdowns could come. It remains to be seen whether OpenSea and other Web3 companies can regain their momentum when market conditions improve. For now, economic reality has set in.