The furor for NFTs has declined considerably since they reached their peak of popularity between the end of 2021 and the beginning of 2022. However, a study reveals that the reality of this market is even more serious than one could imagine, since 95% of non-fungible tokens in existence have no economic value of any kind.
The analysis of dappGambl focuses on the current situation of NFTs in Ethereum, the most popular blockchain for the creation, commercialization and transfer of this type of assets. There, 73,257 collections were identified, of which 69,795 had a market valuation equivalent to 0 ETH.
Although the research does not specify the cases of NFTs in other networks such as Solana, Polygon, or even Bitcoin with its controversial Ordinals, it is logical to assume that the trend is the same. That the volume of non-fungible token transactions has been barely 80 million dollars last July, against the 2.8 billion dollars August 2021, is conclusive data that the NFT bubble has burst a while ago.
An important element that dappGambl exposes is that the supply of NFTs considerably exceeds the demand from potential buyers. In fact, it is indicated that, currently, 4 out of 5 non-fungible tokens remain unsold. And it is logical that this would happen, considering that during its peak of popularity, NFT collections of anything were created.
A clear example of this was the slap that Will Smith gave Chris Rock at the 2022 Oscars. The scandal quickly gave rise to opportunists, who gave life to a whole saga of non-fungible tokens that were nothing more than memes of the event. Who could believe that purchasing such an asset would retain or increase its value over time?
The NFT market is falling apart
Gone are the times when extravagant amounts were paid for an NFT. And some of the first investors in this type of asset They received a reality check in the worst possible way.
The most notable case may be that of the person who bought the first tweet in history. In March 2021, an individual paid $2.9 million for the NFT of Jack Dorsey’s first Twitter post. But when he wanted to resell it in April 2022, the maximum bid was $280, when the owner expected to raise no less than $48 million.
There have been cases of NFTs that have been sold for much higher figures than those just mentioned. But this example serves to demonstrate that FOMO (Fear of missing outor fear of being left out) has been crucial in explaining the reason for the explosion in popularity of these assets and the irremediable fall in their market value.
Of course, the crypto winter has also played its role in this whole story. The furor over NFTs occurred at a time when the prices of Bitcoin and Ethereum reached their all-time high. When market prices crashed in mid-2022, non-fungible tokens also took a hit. After all, the assets They lost half or more of their dollar value, almost overnight..
Prices very far from those of the peak of fury
That 95% of NFTs today have no value in the market is a devastating fact. However, there are still proposals that maintain interest and that continue to be marketed. But prices are nothing like what we saw during the height of the craze over these assets.
According to dappGambl, some 8,850 NFT collections have the highest market valuation. Of the total, the majority (3,643) have a value between 100 and 200 dollars. But even within the top franchises in the world of non-fungible tokens, 1,614 have a price equivalent to zero dollars. And the most expensive ones? Just 80 NFTs are worth more than $6,000. Number clearly far from the millions they knew how to mobilize.
It was always known that, like any other element tied to the world of cryptocurrencies, NFTs were instruments of financial speculation. These were very high-risk proposals, but they also promised a very high reward. Just as many people have spent thousands or millions of dollars on these assets and today find that what they have in their hand—or on the blockchain—is worthless, others have lined their pockets by taking advantage of the opportunity.
Does this mean the end of NFTs? Not necessarily. Just because most collections are dead doesn’t mean the underlying technology isn’t interesting or doesn’t have potential practical applications. However the hype Initially it was stronger and today many are paying the consequences of being carried away by profit and FOMO.
The word NFT today generates rejection in a large number of people. But it is impossible to rule out that these assets will return to center stage one day. Whether with pieces of art that are unique enough to maintain their value despite the passage of time, or as new instruments for digital validation of documents, just to mention a few examples. Time will tell.