The Dark Side of NFTs: 95% of Holders May Be Left with Valueless Investments
In a startling revelation, researchers analyzing over 73,000 NFT collections have concluded that “the majority of NFTs are becoming ‘valueless’ when traded at a market capitalization of 0 Ethereum (ETH).” The rapid rise of NFTs had been hailed as a new frontier in the cryptocurrency industry, with the NFT market witnessing monthly trading volumes of nearly $2.8 billion in August 2021.
However, by July 2023, the landscape had changed as the market entered a downturn. Many NFT projects struggled to find buyers amid a dim outlook for future value.
Through a comprehensive analysis of over 73,000 NFT collections across the entire space, a disappointing result emerged: only 21% of collections were confirmed to be complete or 100% ownership, while the remaining 79% were still in a waiting-to-be-bought state.
“Nearly 4 out of 5—have NFTs still unsold. This situation highlights a significant imbalance between creating new non-fungible tokens (NFTs) and actual demand for these digital assets.”
The imbalance between the NFT frenzy and real-world demand underscores the issue of oversupply, creating a buyer’s market. In such an environment, savvy investors are increasingly scrutinizing uniqueness, potential value, and the story behind NFT projects before diving in.
“95% of those holding NFT collections are currently holding worthless investments. After examining these figures, we estimate that the 95% includes over 23 million individuals whose investments are currently valueless.” Further research into the NFT season, examining 8,850 top NFT collections, discovered the persistence of this worrisome trend.
Even among these successful projects, 18% have floor prices at 0, while only 1% of collections have prices above $6,000. This reality sharply contrasts with million-dollar deals that once dominated headlines. This highlights the nature of value in a market driven by speculation and passing trends.
For instance, the MacContract project on Ethereum boasts a floor price of $13,234,204.2 USD but the lowest-ever revenue of $18. This example underscores the clear disconnect between listing prices and real-world transactions. Such disparities reveal the speculative undercurrents running through different segments of the NFT market. Essentially, listing prices often lack real-world demand or transaction history.
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