Experts Say NFTs May Have Been Scams All Along: New Study Reveals 95% Are "Now Worthless"

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95% of NFTs are now worthlessPhoto bythe author (licensed under CC BY 2.0)

A recent study conducted by dappgambl.com has found that 95% of non-fungible tokens (NFTs) are now considered to be worthless.

Key Takeaways:

• 95% of NFTs are now worthless, as revealed by a recent study.
• The value of NFTs has declined significantly, with less than 1% currently worth more than $6,000.
• A staggering 79% of NFT collections remain unsold, indicating a lack of demand in the market.
• To have lasting value, NFTs should provide historical relevance, true art, or genuine utility.

The Decline in NFT Value

The value of NFTs has seen a significant decline since reaching a peak trading value of $17 billion in 2021, with less than 1% of NFTs worth more than $6,000.

"This statistic effectively means that 95% of people holding NFT collections are currently holding onto worthless investments. Having looked into those figures, we would estimate that 95% to include over 23 million people who’s investments are now worthless" [according to daapGambl.com].

This sharp drop in value has left many investors questioning the long-term viability of this digital asset class.

Ownership percentage of Current NFT marketPhoto bydaapgambl.com

According to a new study titled "Dead NFTs: The Evolving Landscape of the NFT Market", by crypto research group dappGambl, the findings reveal that 95% of non-fungible tokens (NFTs) are now worthless. The study analyzed 73,257 NFT collections and found that 69,795 of them had a market cap of zero Ether (ETH), meaning that the tokens had no monetary value. This translates to approximately 23 million investors owning tokens that are now worthless.

In addition to the decline in value, the study also highlights the lack of demand in the NFT market. A striking 79% of NFT collections remain unsold, indicating a waning interest from buyers. This lack of demand further contributes to the declining value and raises concerns about the future prospects of NFTs.

Given these findings, the study suggests that NFTs need to offer more than just a digital token. To have lasting value in the market, NFTs must provide historical relevance, showcase true artistry, or offer genuine utility. This shift towards more meaningful and tangible attributes could help restore confidence in the NFT market and support its long-term growth.

Lack of Demand in the NFT Market

With 79% of NFT collections remaining unsold, it seems as though NFTs are struggling to find buyers, resulting in their value plummeting. The oversaturation of the market and the sheer volume of NFTs available make it difficult for individual collections to stand out and attract attention.

One researcher at daapGambl, had this to say:

"One project had a floor price of more than $13 million, but all-time sales of just $18... It becomes clear that a significant portion of the NFT market is characterized by speculative and hopeful pricing strategies that are far removed from the actual trading history of these assets."

The study's findings reflect the current state of the NFT market, where enthusiasm and hype have waned, leading to decreased interest from potential buyers. Many NFTs lack the unique characteristics or artistic value necessary to attract collectors and investors. As a result, these tokens remain unsold, contributing to the overall decline in the value of NFTs.

Can NFTs Still be Valuable in the Future?

Historical relevance plays a crucial role in determining the value of a any piece of art. Whether it is a significant moment in history, cultural phenomenon, or a milestone in an artist's career, researchers at daapGambl believe NFTs that capture and preserve these moments have a higher chance of retaining value. Collectors are drawn to NFTs that hold a piece of history and offer a unique storytelling element.

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

True artistry is another important aspect to consider. NFTs that showcase exceptional artistic talent, creativity, and craftsmanship tend to have a higher potential for long-term value. Artists should focus on creating unique and original pieces that stand out in a sea of mass-produced content. Collectors appreciate the beauty and skill behind each artwork and are more likely to invest in NFTs that demonstrate true artistic value.

Lastly, genuine utility can significantly impact the value of an NFT. Tokenizing assets that serve a purpose beyond being a mere digital collectible can attract buyers who see practical value in owning an NFT. Whether it is ownership rights, access to exclusive content, or special perks, NFTs that offer utility provide a tangible benefit to collectors, making them more likely to retain their value over time.

Summary

Overall, the study reveals that a significant majority of NFTs have now lost their value, with only a small percentage remaining valuable in the market. According to the findings by crypto research group dappGambl, 95% of non-fungible tokens (NFTs) are now worthless. This translates to approximately 23 million investors owning tokens that are now worthless.

The decline in the value of NFTs is evident and this significant drop in value highlights the need for meaningful and sustainable approaches to NFT creation in order to ensure lasting value.

Based on these findings, the researchers recommend that NFTs should provide historical relevance, true art, or genuine utility in order to have lasting value in the market. This suggests that focusing on creating NFTs with intrinsic and meaningful qualities will help ensure their value over time.

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