In recent years, many couldn't stop saying that NFTs were the future and an easy way to become a millionaire. How did that turn out? Not very well, in fact. New information suggests that NFTs are practically dead.
According to a report by dappGambl, using data from NFT Scan and CoinMarketCap, NFTs have lost most of their value after the hype cycle ended. They analyzed 73,257 collections and found that just over 95% (69,795 of them) have lost all their value.
This means that approximately 23 million people now own NFTs that are worth less than $1 MXN (Mexican peso). This also translates to significant losses for all those who invested a substantial amount of money in NFTs, hoping to acquire assets that would appreciate over time.
"With stories of digital art pieces selling for millions and overnight success stories, it's easy to forget that the market is full of traps and potential losses," the research notes.
It's worth mentioning that the outlook doesn't look very positive even when we exclude all the collections that never enjoyed success. 18% of the 8,850 collections that reached a higher cost are now worth $0 USD. Furthermore, 41% have a value ranging between $5 and $100 USD.
Lastly, only 1% of NFTs are priced above $6,000 USD, a far cry from the millions they reached years ago. Without a doubt, it's a tough time to own an NFT.
What Is an NFT?
In case you've been living under a rock and missed the NFT craze, let's explain what it's all about.
NFTs are images tied to the blockchain, typically the Ethereum blockchain. Each NFT is unique because it has a signature that cannot be duplicated. This artificial scarcity, combined with tremendous hype, caused several of these collectibles to reach astronomical prices.
At its peak, the NFT market was said to have a monthly trading volume of $2.8 billion USD. Moreover, pieces from the most valuable collections, such as Bored Ape Yacht Club, sold for millions of dollars.
It's worth noting that some NFTs offered additional perks, like event invitations or exclusive merchandise access. That said, many bought them purely for speculation, hoping to become overnight millionaires.
While there's always a chance that NFT hype could return and their value could recover, it seems like a challenging prospect. Thus, we might be witnessing the last moments of NFTs as we know them.
What do you think of this news? Have you ever purchased an NFT? Let us know in the comments.
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