Your Survival Guy has watched many investment fads come and go, with speculators piling in with dreams of making it big, only to watch as the hype cycle fades and values decline. It appears that the end may have come for one of the most recent fads, Nonfungible tokens, or NFTs. Much like blockchain, there’s a lot of interesting technology wrapped up in NFTs that may find a good use, but the speculative buying of many NFTs left a lot of people wondering where the value was supposed to be. Now, according to a new study by dappGambl, which describes itself as “your go-to platform for everything crypto and online gambling,” the value of most NFTs has now fallen to $0.00. The study’s authors write:
In the vibrant world of cryptocurrencies, Non-Fungible Tokens (NFTs) have emerged as the stars of recent years.
The hype around NFTs peaked in the 2021/22 bull run that saw nearly $2.8 billion in monthly trading volume recorded in August 2021. From this, NFTs captured the collective imagination worldwide with multiple news reports of million-dollar deals for sales of certain NFT assets.
People were excited about this new type of online asset and something of a goldrush appeared to start. Fast forward to today… and the NFT market is starkly different.
Data from the Block reveals a weekly traded value of around $80 million in July 2023, just 3% of its peak back in August 2021. So what happened?
NFTs had a bull run then crashed. Hard. We now find ourselves in the midst of a bear market for NFTs, with numerous projects now struggling to find buyers following a pessimistic market outlook on their future value.
So what does the current NFT market situation look like, are there still ‘white whales’ that can command million-dollar-deals, and do NFTs have a future? We’re here to outline all three and hopefully end on a high note that will leave you feeling optimistic.
After all, that unrealistic hype could never be sustained, but the future of NFTs is still very much in play.
The Current State of the Overall NFT Market
As previously mentioned, things have slowed down dramatically within the NFT market as the hype has come to a crashing halt. We know this. We hear about it often. But just how bad is the problem?
The team here at dappGambl has decided to investigate the problem and we’re here to outline it all for you below.
Using data provided by NFT Scan, we have compiled a comprehensive analysis of over 73 thousand NFT collections (73,257, to be exact) in order to identify key trends, assess the health of the market, determine the factors contributing to successful projects, and hopefully gain insights into the potential future trajectory of the NFT ecosystem.
The results were shocking, to say the least.
The Vast Majority of NFTs are Worthless
Of the 73,257 NFT collections we identified, an eye-watering 69,795 of them have a market cap of 0 Ether (ETH).
This statistic effectively means that 95% of people holding NFT collections are currently holding onto worthless investments. Having looked into those figures, we would estimate that 95% to include over 23 million people who’s investments are now worthless.
This highlights the incredibly high-risk nature of the NFT market and underscores the need for careful due diligence before making any purchases, especially ones of high-value.
This daunting reality should serve as a sobering check on the euphoria that has often surrounded the NFT space. 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.
E.J. Smith - Your Survival Guy
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