We have bad news for "investors" of non-fungible tokens, or NFTs. According to a new study of currently available NFT collections, the vast majority of them have lost all of their value and are now worth approximately $0. That's a tough pill for those who pinned their retirement plans on images of apes with a cigarette dangling from their mouths.
The latest study of the NFT marketplace was performed by dappGambl, a cryptocurrency "gambling" analysis firm. To understand the current market for NFTs, it examined 73,257 existing NFT collections. It discovered that 69,795 had a 0 Ether (ETH) market cap, which is to say they were worthless, according to Kotaku. The site's analysis is that 95% of people who own an NFT—about 23 million people—are the proud owners of an investment with zero value. Additionally, it says the crash of NFT values is a reminder of the "high-risk nature" of this market, which exploded in 2021 and into 2022 before crashing due to various factors.
The report details a stark contrast in the existing balance between supply and demand for NFTs, essentially stating too many are being minted with little to no demand for them. As proof of this phenomenon, it says that 79% of all NFT collections have remained unsold. This imbalance between the number of NFTs available and the number of buyers is making it a buyer's market, driving down prices and allowing buyers to be more discerning, according to the study.
Although the report is undoubtedly bad news for those who own NFTs, it's unsurprising that most of these "assets" couldn't hold their value. Even though they have a unique identity on the blockchain, and an owner can claim they own the original version of something, anyone can just right-click on an NFT image to save it, as we all know. That might not work in a game like Ghost Recon Wildlands, but the honeymoon is over for this nascent "art" market.
The bright side is that some NFTs still have some value. Looking at the Bored Ape Yacht Club, we see most are going for about $1,500 or so, which isn't nothing. However, we vividly remember these images selling for big money in 2022. The actor Seth Green famously paid $300,000 just to recover his own Ape stolen from him, indicating how valuable these images used to be. A year ago, NFT trading on OpenSea, which is/was the most popular NFT marketplace, had dropped a staggering 99% from its peak, so the results of this study are not a huge surprise.
All that said, in summary, now is a great time to buy an NFT.
