The once high-flying world of non-fungible tokens (NFTs) has crashed back to earth, leaving 95% of digital collectibles worthless, according to a new report.
The report, by researchers at DappGambl, found that 69,795 of 73,257 collections it examined are now worth no Ethereum, leaving their estimated 23 million holders with worthless investments.
“This daunting reality should serve as a sobering check on the euphoria that has often surrounded the NFT space,” the report said. “Amid stories of digital art pieces selling for millions and overnight success stories, it is easy to overlook the fact that the market is fraught with pitfalls and potential losses.”
The researchers also found that there isn’t enough demand to keep up with the current supply. Of the collections studied, almost four out of five remain unsold, underlining the imbalance between the creation of new NFTs and the actual demand for them in the current market, the report said.
In the past, news headlines were filled with stories of NFTs being sold for millions of dollars. Now, less than one percent are up for sale at prices exceeding $6,000. The bulk of the most expensive collections fall within the $5 to $100 range, the report said, and almost a fifth of what are considered “top” collections have a starting price of zero dollars, the study showed.
NFTs Will Evolve
“The 2021 hype was bound to fail, as all overhyped things often are,” it said. “At dappGambl, we still maintain that once the dust has settled, we will start to see an evolution within NFTs.”
NFTs will never go back to how they were in peak 2021.
The culture is dead.
Here’s why: pic.twitter.com/d1WKuOamm9
— Aaron (@AaronSage) April 21, 2023
To weather market downturns and have lasting value, it says, NFTs need to either be historically relevant (similar to first-edition Pokémon cards), true art, or provide genuine utility, it said.
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