In the midst of an era where digital monopolizes not only communication but value, the booming bubble of Non-Fungible Tokens (NFTs) has finally met its bursting point, a scenario as obvious as it was inevitable. A recent study featured in an article by Neirin Gray Desai from DailyMail highlights a stark reality: 95% of the NFT market is now categorized as ‘worthless’. The wave that swept celebrities like Justin Bieber into a $1.3 million expenditure for a ‘Bored Ape’ NFT has retreated, leaving the artwork’s value deflated by 97% to a mere $37,000.
The study from crypto site dappGambl puts figures to the foretold debacle – out of 73,257 NFT collections, 69,795 boast a market cap of zero. Even the supposedly prestigious collections have been stripped of their worth; 18% of NFTs among the top 8,850 collections are now valueless. Moreover, the total trading volume of the NFT marketplace nosedived from around $5.36 billion at its zenith in January 2022 to just $410 million by August, embodying a mere whisper of its former hype at less than 8 per cent (according to data from The Block).
In a market once blinded by digitized dazzle, the steep drop in the value of NFTs such as the ‘Winter Bear #1178’ from over $35,000 to $6.50, and ‘GOOP 7803’ now valued at around $0.50, stands as a no-brainer consequence of a market running on speculative froth rather than substantial worth. While some celebrities face lawsuits for allegedly inflating the market, the rest of the holders are left to reckon with assets whose value plummeted faster than they skyrocketed. The narrative of celebrities like Madonna and Jay-Z making grand entrances into the NFT arena, only to witness an 89% and a significant drop in their assets’ value respectively, encapsulates the market’s saga from glam to gloom.
Now, despite a sobering reality check, where 79% of all NFT collections are now unsold, the study suggests a glimmer of potential in NFTs finding real-world utility in sectors like gaming, real estate, and digital identity. But the question remains if this projection stems from a foundation of learned lessons or mere hope tinted with the lingering hues of disillusionment.
The NFT bubble burst is no revelation but a belated acknowledgement of a market thrumming on the beats of hype and celebrity endorsement. This ‘no shit, Sherlock’ moment serves as a stark reminder that the digital realm’s lustre can blind masses to the rudimentary economic principle: what goes up on sheer speculation, must come crashing down when reality intervenes.
- “Dead NFTs: The Evolving Landscape of the NFT Market” from dappGambl
- “Ethereum NFT trading volume hit two-year low in August” from The Block
- “NFT crash: 95% of the market is now ‘worthless’, study finds – as value of ‘Bored Ape’ artwork owned by Justin Bieber plummets by 97%” by Neirin Gray Desai from the Daily Mail
- “The vast majority of NFTs are now worthless, new report shows” by Maya Yang from the Guardian (basically the same article, just three days later)