A few years back, NFTs were the most raging thing in the crypto community. They could revolutionize asset holding, allowing people to own millions and monetize their talents to the highest ability.
However, a new study reveals that 95% of NFT collections, held by about 23 million globally, are worthless. The real question is that NFTs are worthless now.
Why NFTs are deemed worthless today
Compared to the statistics of the rise and bull run of NFTs in 2021, the recent trend has shown a decline in the market value of these digital assets. In a new report by mainstream blockchain media dappGambl titled “Dead NFTs: The Evolving Landscape of the NFT Market,” the study revealed that most NFTs are trading at 0 ETH, making them “worthless.”
According to the published report, out of 73,257 total NFT collections, 69,795 have a market cap of 0 ETH. The current bear run the NFT market finds itself is an indicator of the position of NFTs generally. There has been an imbalance of supply and demand in the NFT space, with more supply than demand. The report reads that almost four of every five NFTs remained unsold, leading to a significant imbalance between creating new NFTs and actual demand for them.
Furthermore, the value of these digital assets remains another issue that contributes to its current “worthless” state. A look at the top 8,859 NFT collections on CoinMarketCap reveals that about 18% of these top collections have a floor price of zero. Forty-one percent of the collections in this category are priced between $5 and $100. Only 1% have a value of about $6,000.
Another problem of NFTs highlighted by the report is the issue of sustainability. In addition to the market imbalance and apparent lack of value of NFTs today, the cost of producing NFTs far outweighs its current market value. Although NFTs don’t require as much computing power as cryptocurrencies, they still need much carbon to mint them into blockchain systems. For an asset without high value and constant demand, they are burning away valuable energy for collections that no one buys.
In addition, the report identified about 195,000 NFT collections with no apparent owners or market shares. A culmination of these indicators above is what, in essence, led to the conclusion that 95% of NFT collections are worthless today. Coming from its nearly $2.8 billion monthly trading volume in 2021, this report makes the market look bleak.
There have been different reactions to the revelation of this study that about 95% of NFTs are worthless. While some take the position that NFTs have been worthless “a long time ago,” many other comments by crypto users on social media remain optimistic about the future of these digital assets.
Taking caution and understanding the market, its trends, credible research and every other essential insight before taking a plunge is vital.