The once-hyped world of NFTs, or non-fungible tokens, has seen a precipitous decline, rendering tens of thousands of digital collectibles virtually worthless.
A recent report by dappGambl has unveiled a startling reality: 95% of NFT collections, totaling 69,795 out of 73,257, now have a market cap of zero Ether. This revelation has left a staggering 23 million individuals who invested in NFTs facing the harsh reality of worthless holdings.
NFTs, celebrated for their ability to authenticate digital assets like images, videos, and text, had ignited a fervor that drew celebrities, and artists into the fold.
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The report’s findings mark a stark contrast to the heady days of NFT mania when crypto entrepreneur Sina Estavi made headlines with a $2.9 million purchase of Jack Dorsey’s first tweet.
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The report’s implications are clear: the NFT market, once seen as a lucrative frontier, is fraught with pitfalls and potential losses. The researchers noted that 79% of all NFT collections have remained unsold, reflecting an oversupply in a highly speculative and volatile market.
Examining the top NFT assets, dappGambl researchers discovered that 18% of these collections had a floor price of zero, while 41% were valued between $5 and $100, indicating a lack of perceived worth. Remarkably, less than 1% of collections exceeded $6,000, a far cry from the million-dollar deals that characterized the market in 2021.
The report also sheds light on the environmental cost of NFT minting, with 195,699 NFT collections emitting approximately 16,243 metric tons of CO2, equivalent to the yearly emissions of thousands of homes or cars.
Moreover, the report exposed the discrepancy between listed floor prices and actual sales data, revealing a significant issue in the NFT market – inflated valuations that do not reflect genuine buyer interest or real-world transactions.
Despite these challenges, dappGambl researchers remain optimistic about the future of NFTs.
“At dappGambl, we still maintain that once the dust has settled, we will start to see an evolution within NFTs,” the researchers wrote, noting that to endure market downturns and gain lasting value, NFTs must possess historical significance, true artistic value, or provide genuine utility.
Information for this story was found via dappGambl, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.