Despite gaining mainstream attention and major investment in 2021 and 2022, new research has emerged showing that 95 per cent of non-fungible tokens (NFTs) are worthless.
dappGambl, a cryptocurrency analyst firm, has published new research which found that 69,795 out of the 73,257 total NFT collections it identified have a market cap of 0 Ether.
“This statistic effectively means that 95 per cent of people holding NFT collections are currently holding onto worthless investments,” Vlad Hategan, NFT gaming specialist at dappGamble writes in the report, estimating that this translates to over 23 million people whose investments have lost all value.
While this total does include a lot of junk assets, dappGambl also found that of 8,850 brand-name NFT collections like CryptoPunks, 18 per cent of them have a $0 floor price. Around four in ten of those are worth between $5-100, which the report said indicated “a lack of perceived value among these digital assets”. Less than 1 per cent of these NFTs are currently valued at over $6,000, a major departure from the multi-million dollar deals which were reported in the past.
Even though this already makes for ugly reading for crypto enthusiasts, the analyst warns that the “situation may be even bleaker than these numbers suggest.”
The report cites MacContract on Ethereum which has a floor price of $13,234,204.2, but all-time sales of only $18.
“This stark discrepancy between listed floor prices and actual sales data exposes a significant issue in the NFT market – inflated valuations that don’t reflect genuine buyer interest or real-world transactions,” Hategan writes.
“Such disparities reveal a speculative nature in parts of the NFT market, where exorbitant prices can be set by sellers without any bearing on tangible, real demand.”
But while this NFT crash has been disastrous for investors, dappGambl is cautiously optimistic about the future and that “we will start to see an evolution within NFTs” – but only if they evolve beyond digital collectibles and “either be historically relevant (akin to first-edition Pokemon cards), true art, or provide genuine utility.”