New Study Reveals That the Vast Majority of NFTs Hold Zero Value
A recent report released by dappGambl, a community of experts specialising in finance and blockchain technology, sheds light on the stark reality of the NFT (Non-Fungible Token) market. The analysis encompassed a staggering 73,257 NFT collections, and its findings are striking: a whopping 95 percent of these once-hyped digital assets now sit at a market value of precisely zero Ether (ETH), Ethereum’s cryptocurrency.
In practical terms, this means that nearly all NFTs, which at their zenith collectively traded at a volume of $17 billion during the frenzied bull market of 2021, are currently devoid of any monetary worth. This revelation is a significant fall from grace for a sector that once commanded the spotlight. The report estimates that a staggering 23 million investors hold these tokens, which now possess neither practical utility nor intrinsic value.
Furthermore, the report highlights the vast oversupply of NFTs compared to their demand. Only 21 percent of the collections studied can lay claim to full ownership, leaving approximately four out of every five collections unsold. The report attributes this trend to discerning buyers who seek NFTs with clear use cases, compelling narratives, or genuine artistic value. Projects lacking these attributes struggle to attract attention and secure sales.
The days of NFT headlines boasting multimillion-dollar sales have become a distant memory. Today, less than one percent of NFTs command prices exceeding $6,000. Most of the top collections now fall within the price range of $5 to $100. Astonishingly, close to one-fifth of these so-called “top” collections have a floor price of zero. Even among the more expensive NFTs, the report cautions that these prices may not correlate with genuine demand, instead representing hopeful pricing from sellers and potentially skewing investors’ perception of an NFT’s meager intrinsic value.
The researchers from dappGambl conclude that while a resurgence akin to the NFT boom of 2021–2022 is unlikely, these digital assets may find a new lease on life by acquiring specific functions, such as granting access to special events or serving as virtual items in video games.
However, addressing the most significant drawback of NFTs remains elusive: their environmental impact. NFTs are created on blockchains, a process that consumes substantial energy, and are traded on platforms that rely on cryptocurrencies mined using energy-intensive computer rigs. The “Dead NFTs” report points out that the approximately 200,000 NFT collections with no apparent owners or market share identified in the study have contributed to carbon emissions equivalent to the annual output of 2,048 houses or 3,531 cars.
While environmental concerns were often brushed aside during the NFT craze, they may resurface if NFTs make a modest comeback. However, it remains to be seen if such concerns will impede the allure of the next hype cycle.
