In a stark revelation, the sentiment surrounding Non-Fungible Tokens (NFTs) has dramatically shifted over the past couple of years, with the market experiencing a significant downturn. A recent study conducted by dappGambl, a company specializing in blockchain-related gaming and finance, sheds light on the extent of this NFT disaster.
The research, which encompassed an examination of over 73,000 NFT collections, uncovered a staggering statistic: more than 95 percent of all existing NFTs, totaling over 69,000 collections, now hold a market cap of precisely zero dollars.
Even when narrowing the focus to top-tier NFTs, the situation remains bleak. These high-end tokens typically command values ranging from a mere $5 to $100. To find NFTs valued at four figures or more, one must venture into the top one percent of the market.
Critics have often derisively referred to NFTs as “expensive JPEGs,” and there is some truth to that characterization. Notably, during the height of the NFT boom in 2021, celebrities like Madonna, Justin Bieber, Eminem, and Neymar Jr. entered the market, investing seven-figure sums in NFTs from collections such as the Bored Ape Yacht Club. Unfortunately, many of these high-profile investors have since witnessed their investments plummet by at least 90 percent in value.
The case of Sina Estavi, a crypto investor who spent a whopping $2.9 million on an NFT version of Twitter founder Jack Dorsey’s inaugural tweet, serves as a poignant example. In a subsequent attempt to sell the NFT, the highest bid received was a mere $1.
Despite the current gloomy outlook, there may still be a glimmer of hope for the NFT market. Some NFT use cases leverage the underlying blockchain technology to offer unique opportunities. For instance, music icons like Justin Bieber, Rihanna, and David Guetta are now introducing NFTs tied to their hit songs. What sets these NFTs apart is that each represents partial ownership of the music streaming rights for the respective songs.
In practical terms, owning one of these NFTs entitles the holder to a share of the revenue generated each time someone streams the associated song on platforms like Spotify and Apple Music. While it may not lead to substantial wealth, this model demonstrates the enduring potential of NFTs, highlighting the multifaceted capabilities that blockchain technology can still offer in the world of digital collectibles.
