NFTs (Non-Fungible Tokens for the uninitiated) were once the new, hot thing being hyped to provide artists and content creators a way to profit from the digitization of everything. Inherently tied to cryptocurrencies and blockchain technology, this was supposed to be the way of the future for artists. But there were always skeptics, those who pointed out that NFTs were basically vapor art. The art itself was also depressingly easy to copy, steal, and counterfeit. Then, of course, they rely on the use of cryptocurrencies that are highly volatile. None of this inspired confidence in many of us. Then there was the over-hyped nature of the entire NFT market. Too many with a vested interest in profiting from the spread of this idea rather than by producing their own art or content (those involved in the Trump NFTs being a prime example) also gave some of us pause as we contemplated not a new way for artists to market their art but a new tulip bulb craze.
Now, it seems, those fears and hesitations have been borne out. A new study by dappGambl has estimated that some 95% of all NFTs are now essentially worthless, leaving about 23 million NFT holders in the lurch. More troubling for content creators is the fact that only about 20% of NFT collections have 100% ownership, meaning that many NFTs are now going unbought and unwanted. This is all pretty grim news for those who thought investing in NFTs was a good bet.
The size of dappGambl’s study is impressive, looking at 73,257 NFT collections. This was an extensive survey of the market and a depressing one for NFT enthusiasts. Of those 73,257 collections, 69,795 of them had a market cap of zero. A PetaPixel article discussing the study also points out that the underlying cryptocurrencies like BitCoin and Ethereum that NFTs are valued in have also fallen in value significantly from the high points they enjoyed at the height of the NFT buying boom in 2021. The article also notes the disenchantment some artists are experiencing in the NFT market as it drops and the way in which potentially big players like Meta and Canon have backed away from the NFT market significantly.
In general, we shouldn’t find any of this surprising. NFTs were always laden with the problems of cryptocurrency and the nature of digital art. That the whole enterprise seems to be well on it’s way to collapse is a natural consequence of these problems. Some have no doubt made out very well from the whole exercise, especially those who hyped them to begin with and made their money quickly by buying ans selling early. Some artists certainly did make some money from offering NFTs early on, which is never a bad thing, but now seem to have been left behind by the market that no longer gives them a solid way to market their art. Where NFTs go from here is anybody’s guess, but the likeliest place seems to be down into oblivion.