The Non-Fungible Token (NFT) market, once hailed as a cryptocurrency sensation, is currently facing a significant transformation. A recent study conducted by dappGambl has shed light on the current state of the NFT market, revealing a startling fact: a staggering 95% of NFTs now have a market cap of zero Ethereum.
Here’s a closer look at the findings of the study and the factors contributing to this downturn:
1. The NFT Boom and Current Status: NFTs experienced a meteoric rise in popularity within the cryptocurrency world, with monthly trading volumes hitting $2.8 billion in August 2021. However, the NFT market has faced challenges recently, with a 114% increase in searches for “Are NFTs Dead” in the past year.
2. dappGambl’s Study: The study examined over 73,000 NFTs listed on NFTScan and analyzed the top 8,000 NFTs on CoinMarketCap. Its goal was to determine how many NFTs had a market cap and a minimum price of zero, shedding light on “dead” NFTs and unsold collections.
3. The Grim Reality: Of the 73,257 NFT collections analyzed, a staggering 69,795 were found to have zero Ethereum market value. This means that 95% of the current NFT market can be considered to have no discernible value. Furthermore, only 21% of the collections surveyed could claim 100% ownership, leaving 79% of NFT collections unsold.
4. Challenges for Prominent NFTs: Even among the top 8,850 collections listed on CoinMarketCap, 18% had a minimum price of zero. This indicates that a significant portion of high-profile NFT collections is struggling to maintain demand.
5. Value Discrepancies: Notably, most NFTs are valued between $5 and $100, accounting for 41% of the market. Less than 1% of these NFTs are priced above $6,000, highlighting the challenge of establishing tangible value within the NFT market.
6. The Future of NFTs: Despite these discouraging statistics, experts believe NFTs have a future if they can evolve beyond collectibles. The emphasis is shifting toward NFTs with real use cases, compelling narratives, or authentic artistic value.
7. A Shift to Utility and Significance: NFTs with tangible utility and cultural significance, such as those preserving cultural heritage, enabling in-game purchases, or venturing into real estate, promise long-term value.
In conclusion, the NFT market has evolved significantly from its peak, with the majority of NFTs now holding zero market value. To endure market downturns, the NFT ecosystem must transition beyond collectibles and embrace real-world use cases. As NFTs continue to adapt and innovate, their true potential may lie in delivering real value and utility, ushering in a new era for this transformative technology.
