A new report shows that the non-fungible token (NFT) market has essentially collapsed, and nearly all NFTs are practically worthless.
As seen on Insider, dappGambl’s study investigated 73,257 NFT collections, 69,795 of which have a market value of zero ETH.
“The hype around NFTs peaked in the 2021/22 bull run that saw nearly $2.8 billion in monthly trading volume recorded in August 2021. From this, NFTs captured the collective imagination worldwide with multiple news reports of million-dollar deals for sales of certain NFT assets,” writes dappGambl.
NFTs were all the rage for a spell, and photographers were caught up in the whirlwind. When a single JPEG file created by the artist Beeple sold for nearly $70 million, photographers wondered how they might get a slice of the pie.
“Bryan Minear, a landscape photographer based in Michigan, has always kept a close eye on the crypto space. On Tuesday, he did an NFT drop with Bitski featuring five photographs ranging from $200 to $2,500. Within 10 minutes, he sold out of nearly everything,” PetaPixel wrote in 2021.
Minear said he embraced NFTs when he realized crypto was “here to stay.” Well, stay it did not.
2022 was a tough year for crypto. “In the future, 2022 may be regarded as a turning point for the world of virtual currencies, when they lost their luster and were cast out as a fringe product most people approach with skepticism and caution. Or it may simply be remembered as a stretch of excruciating growing pains for an industry still in its infancy,” wrote NPR at the end of last year.
Currently, Bitcoin is worth $27,223, and Ethereum is $1,630.99, a far cry from their all-time high values of more than $65,000 and $4,700, respectively. As for NFT, the news is dire.
“The vast majority of NFTs are worthless,” writes dappGambl. Based on its research, 95% of people holding NFT collections own an asset with no real value. DappGambl believes that this means that more than 23 million people’s investments “are now worthless.”
“This daunting reality should serve as a sobering check on the euphoria that has often surrounded the NFT space,” dappGambl continues.
It is not just that NFTs are generally worth nothing, people are not especially interested in buying new NFT assets, leaving artists in the lurch.
Minear’s experience of selling out his NFTs in 10 minutes feels like a lifetime ago, as these days, only 21% of the collections that dappGambl has identified have full ownership, meaning that the collections are spoken for by investors and NFT collectors. Put another way, four of every five NFT collections collect dust.
This is not to say that all NFTs are scams or that people should have nothing to do with them, but some NFT collections are remarkably stupid at best.
Consider Melania Trump’s Man on the Moon NFT, which not only violates NASA’s usage guidelines for its imagery but is a complete and total dud. Having been on the market for nearly two months, Trump’s USA Memorabilia operation has swindled fewer than 70 people into buying the “limited-edition collectible” of a public domain image. How this NFT will ever be worth its $75 asking price, let alone increase in value, is beyond all reason.
It is not just people like Melania Trump who are still involved in NFTs in 2023, either. Canon USA got in on NFTs extremely late, too. In April, Canon announced the development of Cadabra, a curated photography marketplace for NFTs. As of now, Cadabra has still not launched.
Of course, some companies have read the tea leaves accurately and distanced themselves from NFTs. Meta, for example, began winding down its NFT operations on Facebook and Instagram in March. The news came after Zuckerberg and Meta hastily got involved with NFTs in 2022. NFTs were crucial to the company’s “metaverse” vision, which has ultimately been a catastrophic failure.
Some people benefited from crypto’s meteoric rise, getting out before its precipitous descent. But at this point, if someone is just now getting their feet wet with crypto or NFTs, they should prepare for calamity.
NFTs went mainstream, and then the bubble burst, as it often does. The financial failure does not even begin to scratch the surface of the environmental devastation wrought by crypto, either. It is unclear what the vast majority of crypto and NFT owners have gotten in return for accelerating climate change.