The NFT bubble has burst, according to an analysis of 73,257 collections that showed 95% of them to be worthless.
The market for NFTs, or non-fungible tokens, has come to a crashing halt, according to a new report from researchers at dappGambl.
Using data provided by NFT Scan, they found that out of 73,257 identified NFT collections, an “eye-watering” 69,795 had a market cap of 0 Ether.
The report estimated that about 95% of collectors, or more than 23 million people, are currently holding worthless NFTs.
Out of tokens that were still worth something, 41% were priced between $5 and $100, and only less than 1% were selling for more than $6,000 – a far cry from million-dollar deals reported during the NFT boom.
“This highlights the incredibly high-risk nature of the NFT market and underscores the need for careful due diligence before making any purchases, especially ones of high-value,” the report said.
It said this “daunting reality should serve as a sobering check on the euphoria that has often surrounded the NFT space.”
“Amid stories of digital art pieces selling for millions and overnight success stories, it is easy to overlook the fact that the market is fraught with pitfalls and potential losses,” the report warned.
Researchers also found that only one in five NFT collections are fully owned by someone, reflecting the “actual demand for these digital assets in the current market landscape.”
The situation contrasts starkly with that just two years ago, when the NFT market peaked at nearly $2.8 billion in monthly trading volume.
Artists and celebrities rushed to jump on in the latest tech craze, eager to capitalize on the trend. One company even started making frames for what NFT enthusiasts tried hard to sell as one-of-the-kind “digital art”.
Now, figures from Block show that the weekly traded value of the NFT market was around $80 million in July this year, just 3% of its peak two years ago.
Despite grim statistics, the report said there is still a future for NFTs.
“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,” researchers said.
More from Cybernews:
Subscribe to our newsletter