- NFT market faces a severe downturn, with 95% of NFTs now considered worthless.
- Environmental concerns arise as NFT creation consumes massive amounts of energy.
- A dramatic 97% drop in NFT transactions over the past two years signals an uncertain future.
In a recent study that’s set to make waves in the world of NFTs (Non-Fungible Tokens), it’s been uncovered that a whopping 95% of these digital assets have lost all their value. This revelation comes from a study conducted by a cryptocurrency company, and it paints a rather bleak picture for a market that was once on fire.
The NFT market, known for its explosive growth during the pandemic and the cryptocurrency frenzy, has undergone a swift and dramatic transformation. Items that used to sell for mind-boggling sums of money have now become essentially worthless, and the overall trading of NFTs has fallen by a shocking 97% over the last two years.
At its peak in August 2021, the NFT market was a powerhouse, with transactions totaling a staggering $2.8 billion per month. Today, it’s a mere shadow of its former self, with just $80 million in monthly transactions, representing a mere 3% of its past glory.
The NFT frenzy led people to spend huge amounts, sometimes in the thousands or even millions of dollars, on what now seem like frivolous computer-generated artworks. Now, these once-prized digital collectibles have lost their luster, and many are questioning the wisdom of their investments.
Several factors have contributed to this decline. Global uncertainties, such as the Ukraine conflict, the rollercoaster ride of Bitcoin and other cryptocurrencies, and rising inflation, have prompted investors to look elsewhere for opportunities.
DappGambl, a cryptocurrency website, conducted a comprehensive study of the current NFT landscape, and their findings are rather disheartening. They discovered that 95% of NFT collections are essentially worthless, leaving approximately 23 million individuals who invested in NFTs with nothing to show for it. Additionally, a surprising 79% of currently available NFT collections have never been sold.
But it’s not just about financial losses. The environmental impact of NFTs is gaining attention, as the process of certifying these digital assets as unique through blockchain transactions consumes significant energy. The study identified 195,699 NFT collections with no ownership records or sales history, revealing that the creation of these NFTs consumed a massive 27,789,258 kWh of electricity. This is equivalent to a carbon footprint of 16,243 metric tons of CO2, equivalent to the annual pollution of thousands of households.
In light of these alarming figures, the study suggests a more thoughtful approach to NFT creation. They propose that NFTs should only be created for historically significant items, genuine works of art, or assets with real-world utility, a return to a more sensible approach that many argue should have been adopted from the outset.
As NFT enthusiasts and investors grapple with the harsh reality of a market in turmoil, the future of digital collectibles remains uncertain. With the vast majority of NFTs now considered worthless, the industry stands at a critical crossroads.
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.