A recent report published by the crypto gambling platform dappGambl has revealed that a significant number of collections comprising non-fungible tokens (NFTs) have seen their market capitalization dwindle to nearly zero. DappGambl’s analysis encompassed 73,257 NFT collections, spanning a spectrum from zombie-like creatures to pixelated avatars and more. However, the findings indicate that a considerable proportion of NFTs hold little to no value, with 69,795 of the collections displaying market caps almost equivalent to zero Ether, one of the top ten cryptocurrencies.
In its report, dappGambl expressed that this data effectively implies that “95% of people holding NFT collections are currently holding onto worthless investments.” This equates to over 23 million individuals whose NFT investments are now virtually worthless.
The Promise and Rise of NFTs
Non-fungible tokens, unlike cryptocurrencies such as Bitcoin and Ether, are uniquely original digital assets that prove exclusive ownership. NFTs gained attention as a potential game-changer across various domains, including art, fan merchandise, music, and gaming. These tokens can be traded multiple times, often fetching bids in the millions of dollars.
In 2021, NFTs experienced a notable surge in popularity, with one of the most expensive NFTs ever sold being ‘Everydays: The First 5000 Days’ by Beeple, a vividly colored collage of around 5,000 images, which sold for $69.3 million.
Major tech and entertainment players, such as Meta (formerly Facebook), Visa, and Hollywood celebrities, joined the NFT craze. Meta attempted to popularize NFTs, referred to as “digital collectibles,” across its platforms, while Visa purchased a “CryptoPunk” NFT for $150,000 to gain insights into the technology and its user base.
Reality Check for NFT Enthusiasts
DappGambl’s report offers a sobering reality check on the exuberance that often surrounded the NFT space. While stories of digital art selling for millions and overnight success have garnered attention, the market is evidently riddled with pitfalls and potential losses, as highlighted by the eroding value of many NFT collections.
However, it’s important to note that some NFT collections, such as the ‘Bored Ape Yacht Club’ and ‘Mutant Ape Yacht Club,’ revolving around stylized monkey-themed assets, still maintain market caps exceeding $100 million, according to CoinMarketCap.
