Not long ago, the world of digital collectibles, or NFTs (Non-Fungible Tokens), was bustling with million-dollar sales and sky-high valuations. These digital assets, unique in nature and tied to the blockchain, captured the imagination and wallets of millions. Are NFTs dead?
Recent research has brought to light some startling statistics. Delving into the vast world of over 73,000 NFT collections, a staggering 90% were discovered to have a market capitalization equivalent to zero. Diving deeper into the premium collections, the dominant price range for most NFTs lies between $5 and $100. The days when digital art pieces fetched millions seem to be in the rearview mirror.
Why did NFTs Crash?
NFTs stormed the world in 2021 and 2022, marking their territory in the digital realm. At its pinnacle, the NFT market experienced a trading volume explosion, touching $2.8 billion within a month. During this period, high-profile collections were setting new sale records, and even prominent celebrities were seen boarding the NFT bandwagon. This surge aligned with the crypto market’s zenith, where notable cryptocurrencies like bitcoin traded around a remarkable $70,000.
What’s Happening to NFTs Today?
Fast forward to the present, a whopping 79% of all NFT collections are still awaiting a buyer. This surplus of NFTs, combined with dwindling demand, has culminated in a marketplace that heavily favors the buyer. In fact, even when considering only the more notable collections based on market cap, a significant portion struggles with value. A mere 1% have an asking price over $6,000, a stark contrast to the exorbitant prices seen just a couple of years prior.
Are NFTs Risky Investments?
The data paints a picture of an NFT market previously inflated by speculation and hope, distanced from the genuine trading histories of these digital assets. This divide between asking prices and real sales indicates a lingering hope among sellers: a hope for another monumental rise in NFT demand reminiscent of the 2021 boom. However, whether such a resurgence is on the horizon remains uncertain.