NFT Crash Leaves 95% Of Digital Collectibles Worthless, Report Says

Disclosure

Updated: 21 September 2023

The information provided on Inside Bitcoins is for educational and informational purposes only and should not be considered financial, investment, or trading advice. Cryptocurrency markets are highly volatile, and investing in digital assets carries significant risk. No profits are guaranteed, and you may lose some or all of your investment. Always invest responsibly and only with funds you can afford to lose.

Join Our Telegram channel to stay up to date on breaking news coverage

The once high-flying world of non-fungible tokens (NFTs) has crashed back to earth, leaving 95% of digital collectibles worthless, according to a new report.

The report, by researchers at DappGambl, found that 69,795 of 73,257 collections it examined are now worth no Ethereum, leaving their estimated 23 million holders with worthless investments.

“This daunting reality should serve as a sobering check on the euphoria that has often surrounded the NFT space,” the report said. “Amid stories of digital art pieces selling for millions and overnight success stories, it is easy to overlook the fact that the market is fraught with pitfalls and potential losses.”

The researchers also found that there isn’t enough demand to keep up with the current supply. Of the collections studied, almost four out of five remain unsold, underlining the imbalance between the creation of new NFTs and the actual demand for them in the current market, the report said.

Partially or fully-owned NFTs (Source: DappGambl)

NFTs Dive

In the past, news headlines were filled with stories of NFTs being sold for millions of dollars. Now, less than one percent are up for sale at prices exceeding $6,000. The bulk of the most expensive collections fall within the $5 to $100 range, the report said, and almost a fifth of what are considered “top” collections have a starting price of zero dollars, the study showed.

NFTs Will Evolve

Still, the dappGambl researchers hold out hope that digital collectibles may survive the current crisis.

“The 2021 hype was bound to fail, as all overhyped things often are,” it said. “At dappGambl, we still maintain that once the dust has settled, we will start to see an evolution within NFTs.”

https://twitter.com/AaronSage/status/1649466781164240896?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1649466781164240896%7Ctwgr%5E31cfa97f3b1c8f5c97092b9421bbb798eaf9e6b3%7Ctwcon%5Es1_c10&ref_url=https%3A%2F%2Finsidebitcoins.com%2Fnews%2Fwill-nfts-ever-return-to-how-they-were-in-peak-2021-heres-what-experts-say

To weather market downturns and have lasting value, it says, NFTs need to either be historically relevant (similar to first-edition Pokémon cards), true art, or provide genuine utility, it said.