Around 23 million people are holding onto useless digital collectibles as a result of the vast majority of Non-Fungible Tokens (NFTs), formerly the darlings of the digital asset market, having fallen to zero value, according to a thorough analysis. Market information indicates that 95 percent of all NFT collections currently have a market worth of zero.
According to Business Insider, the revolutionary idea of NFTs, special digital assets that represent ownership or proof of authenticity of a particular digital good or piece of content, is what first got the cryptocurrency community and the internet in general talking. NFTs are typically connected to a blockchain.
The market saw a massive bull run in 2021 and 2022, which caused trading volumes for these digital items to soar to an astounding $2.8 billion per month. Bored Apes and CryptoPunks, two well-known collections that sold for millions of dollars and attracted A-listers like Stephen Curry and Snoop Dogg to the fray, were the darlings of investors.
The once-vibrant NFT market, however, is now a mere shell of what it once was, according to a report by dappGambl. According to a survey of more than 73,000 NFT collections, an astounding 95% of them currently have a market cap of zero ether, the cryptocurrency most often used to acquire and sell NFTs.
This worrying scenario suggests that the majority of NFTs have dropped to zero, effectively losing all of their value and affecting approximately 23 million owners of these digital assets.
The researchers noted, “This daunting reality should serve as a sobering check on the euphoria that has often surrounded the NFT space.” The study emphasizes the dangers and potential losses that are obscured by tales of instant success and digital artwork fetching millions of dollars. In contrast to the real trading history of these assets, the pricing tactics used in the market today are speculative and optimistic.
The report also reveals that 79 percent of all NFT collections are still unsold, resulting in a buyer's market and excess supply over demand that hasn't done anything to reignite interest. The majority of collections now have little value, even after excluding lower-value, less important projects.
18% of the top 8,850 collections by market size are worthless, while 41% have a price between $5 and $100. Less than 1% of the transactions are more than $6,000, in sharp contrast to the frequent million-dollar transactions seen two years earlier.
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