The majority of NFTs might have lost their value just under two years after a surge in the popularity of digital collectibles.
According to a study utilizing data from NFT Scan and CoinMarketCap, among the 73,257 NFT collections analyzed, a staggering 95% of them had a market capitalization of zero ether. Their calculations indicate that nearly 23 million individuals are in possession of these valueless assets.
“This statistic effectively means that 95 percent of people holding NFT collections are currently holding onto worthless investments,” a report said. “Having looked into those figures, we would estimate that 95 percent to include over 23 million people whose investments are now worthless.”
If you’re unaware, NFTs are digital representations of art or collectibles linked to a blockchain. Usually, each NFT is tied to Ethereum and possesses an exclusive signature that cannot be replicated. In 2021 and 2022, the NFT market experienced a substantial spike, even reaching a $2.8 billion monthly trading volume.
During that period, well-known NFT collections like Bored Apes and CryptoPunks were fetching millions of dollars in sales. Additionally, notable figures like Stephen Curry and Snoop Dogg also joined in the trend. This surge coincided with the peak of the cryptocurrency market, with Bitcoin trading at nearly $70,000. However, as of Wednesday, the crypto’s value had settled just above $27,000.
Nevertheless, the study shows 79% of all existing NFT collections are currently sitting without any buyers. As a result, this leads to an oversupply situation that has resulted in a buyer’s market. Unfortunately, this oversupply hasn’t contributed to rekindling enthusiasm for NFTs.