Sunday, April 14, 2024

95% NFTs which were once sold for millions now turn worthless: Report

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Remember NFTs? The digital representation of art or collectibles tied to a blockchain, typically Ethereum ran havoc in the market amidst all the trend and hype surrounding the new ‘cryptocurrency’ which then allegedly had a lot of potential. Well those NFTs are almost completely worthless with report by dappGambl stating that out of 73,257 NFT collections the researchers looked at, 69,795 of them, or slightly over 95%, had a market cap of zero ether. By their estimates, almost 23 million people still hold these worthless assets.

“This daunting reality should serve as a sobering check on the euphoria that has often surrounded the NFT space,” the researchers 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 NFTs saw a massive bull run back in 2021 and 2022 which at one point led the monthly trading volume at $2.8 billion. During that time, NFTs such as Bored Apes and CryptoPunks were selling for millions of dollars, and celebrities such as Stephen Curry and Snoop Dogg participated in the hype. The NFT boom coincided with cryptocurrency’s peak when bitcoin was trading close to $70,000. In comparison to then the price of the crypto on Wednesday hovered just above $27,000.

dappGambl’s study shows 79% of all NFT collections currently remain unsold, and the surplus of supply over demand has created a buyer’s market that isn’t doing anything to revive enthusiasm which has led to most collections having very little value today. Out of the top 8,850 collections by market cap, 18% are worthless, and 41% are priced at $5-$100. Fewer than 1% of the collectibles have a current market value of above $6000, which is a rarity compared to when to the regular million dollar deals two years ago.

“It becomes clear that a significant portion of the NFT market is characterized by speculative and hopeful pricing strategies that are far removed from the actual trading history of these assets,” the researchers said.

“Additionally, this apparent disconnect between listed prices and actual sales could suggest that many sellers are waiting for another massive surge in NFT interest akin to the boom witnessed in 2021, which may not ever occur again.”

Please, also have a look into : SEBI proposes ban on celebrity endorsement of cryptocurrency/NFTs, violations on advertisements

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