Adam Greenbaum, the CMO of Petvisor, became an early adopter of NFTs in 2021, drawn by the allure of art collection without the hefty price tag. Despite spending nearly $70,000 on NFTs, including a $37,000 Bored Ape NFT, he has witnessed the value of his investments drop by about half in the past two years. However, Greenbaum remains resolute, holding onto his digital assets in hopes of a market rebound.
The NFT market’s current outlook remains bleak, with a 2023 report from crypto analysis firm dappGambl revealing that a staggering 95% of NFTs are practically worthless. Amid the hype between 2021 and 2022, approximately 79% of NFT collections have remained unsold, signaling a significant downturn.
The U.S. Securities and Exchange Commission (SEC) has also weighed in on the matter, issuing rulings on dubious NFT offerings, such as Impact Theory’s NFT collection, which was deemed securities sold in violation of federal securities laws.
In 2023, NFT sales plummeted to alarming levels, reflecting a drastic decline in demand. On January 5, the market recorded a peak sales volume of 18,939, but by December 20, that number had plummeted to 1,796, as per NonFungible.com’s market tracker.
Domenic Caravaggio, a Toronto-based NFT collector, compares the NFT frenzy to the 17th-century tulip mania, emphasizing the risks involved. Although his NFTs’ value has dropped, he remains optimistic about the market, particularly in gaming and other real-world applications.
Despite the market downturn, some enthusiasts like Amy Whitaker, author of “The Story of NFTs: Artists, Technology, and Democracy,” focus on the transformative aspects of NFT sales structures and their potential to provide artists with unique financial support through automated royalties.
Justin Jackson, a technology writer in Michigan, acknowledges the volatility of the NFT market but remains hopeful for an upswing. He emphasizes the newness of the market, allowing room for older, seemingly “worthless” NFTs to make a comeback as new buyers enter the space.
While the reasons behind the NFT market crash are challenging to pinpoint, the fall in demand, coupled with a downturn in the cryptocurrency market, has significantly reduced the combined value of all circulating NFTs. Despite criticisms and skepticism, collectors like Caravaggio express confidence in NFTs with legal frameworks and real-world applications, indicating a belief in the enduring potential of this technology.
