Non-fungible tokens (NFTs) are an iconic product of the digital renaissance. At the peak of hype during the 2021 bull market, the NFT market saw monthly trading volume of nearly $2.8 billion in August 2021. But by July 2023, things had changed dramatically.
Weekly trading volume shrank significantly, plummeting to around $80 million.Against this backdrop, a recent study reveals a shocking reality: most NFTs are “worthless”。
The rapid rise of NFT has led to it being hailed as the rising star of the Crypto industry. However, as the dust settles, the market is slipping into a bear market. Many NFT projects are struggling to find buyers amid dim prospects for future value.
The data, which comes from an extensive analysis of more than 70,000 NFTs, stands in stark contrast to the “million-dollar deals” and “overnight success” stories of the past.In fact, of the NFTs analyzed, only 21% were fully claimed or had more than 100% ownership, and 79% remained unsold。
The report mentioned that “almost 4 out of 5 NFTs remain unsold, a situation that illustrates a serious imbalance between the creation of new NFTs and the actual demand for these digital assets.”
This imbalance reflects an oversupply problem between the emergence of new NFTs and actual demand, creating a buyers market. In such an environment, discriminating investors will increasingly carefully scrutinize the uniqueness, potential value, and story behind an NFT project before taking action.
According to the report, “95% of people currently holding NFTs are making a worthless investment.By analyzing this data, we estimate that over 23 million of this 95% have investments that are now worthless。”
“We took a closer look at the top 8,850 NFTs listed on CoinMarketCap and found that this disturbing trend continues.”
Even among these successful projects, 18% had a base price of $0 and only 1% were priced over $6,000. This reality is a far cry from the million-dollar deals that once dominated the news. Thus, in a market driven by speculation and fleeting trends, the nature of value comes to the fore.
MacContract is a project with a base price of $13.23 million but gross sales of only $18, which speaks volumes about the apparent disconnect between the listing price and the actual transaction. This divide exposes the speculative nature of parts of the NFT market. Essentially, listing prices often lack actual demand or transaction history.
This trend shows that speculative pricing is disconnected from the dynamics of actual transactions and has the potential to mislead new or uninformed investors.
The investigation also revealed the environmental footprint of NFTs. Minting the 190,000 NFTs with no apparent owner or market share consumes as much energy as the carbon emissions of 2,048 homes for a year.
As calls for sustainable digital technologies grow, so does the NFT space, especially those that lack obvious utility or true artistic value.
The emergence and subsequent downturn of NFTs sheds light on the hype cycle of the Crypto market. As speculators begin looking for the next gold rush, the question remains whether these NFTs lack real use cases.
Beneath the allure and halo, the NFT story is a harsh reminder to creators and investors, and a dangerous case of “speculative mania.”。
