Summary

The article discusses the current state of the NFT market, addressing the misconception that 95% of NFTs are worthless, and provides insights into the factors contributing to the market's volatility.

Abstract

Despite a recent article by Rollingstone.com suggesting that NFTs are worthless, the NFT market, while experiencing a downturn, is not entirely devoid of value. The article highlights that while 95% of NFTs may not hold significant value, there is still a substantial trading volume, and certain NFTs, like Bored Ape Yacht Club NFTs, maintain high average prices. The market's saturation, lack of value linkage, rampant fraud, the collapse of major Web3 systems, and broader economic conditions have all contributed to the NFT market's challenges. However, the article argues that NFT technology, with its broad applicability beyond the art market, is unlikely to disappear completely, suggesting that investors should conduct thorough research before investing in NFTs.

Opinions

The claim that 95% of NFTs are worthless does not accurately reflect the state of the NFT market, as there is still significant trading volume and valuable NFT collections.
The NFT market has experienced a decline in trading volume, but it remains active, with last week's trading volume reaching approximately $63 million.
The article criticizes the idea that NFTs are totally worthless, drawing parallels with Bitcoin, which has been declared dead multiple times but continues to thrive.
The market saturation and lack of a discernible link to value have led to an environment where the intrinsic value of NFTs is not always clear, contributing to the perception of worthlessness.
Fraud has been a significant issue in the NFT space, with many collectors falling victim to scams, which has deterred further investment for some.
The collapse of

More than 95% of NFTs have zero value

Have 95% of NFTs become “worthless”?

Let’s take a look at what’s going on.

Before we start the article let’s give you a brief overview of what NFT is NFT stands for “Non-fungible token”.

Non-fungible token means that something is unique and cannot be replaced. In contrast, physical and cryptocurrencies are homogenized, meaning they can be traded or exchanged with each other. Each NFT contains a digital signature, which makes each NFT unique.

NFTs are digital assets that can be photos, videos, audio files, or other digital formats. Examples of NFTs include artwork, comic books, sports collectibles, trading cards, games, and more..

😅 Are you a NFT collector too?

Let’s get to the point..

Rollingstone.com recently posted a much-anticipated article calling for an end to irreplaceable tokens (NFTs), sparking widespread discussion. Called “Your NFTs Are Actually — Finally — Totally Worthless,” the article cites a new study by dappGambl, a community of financial experts. While the article has generated a lot of responses both on the site and on Google, we need to recognize that the ideas in it are not entirely accurate.

While the study shows that the majority of NFTs (95%) have no real value, this does not mean that NFTs have died out.

In fact, while NFT trading volume did decline, there was still market activity. According to data collected by The Block, NFT trading volume reached about $63 million last week. While this is down from February’s weekly trading volume of over $360 million, it is not worthless.

Additionally, there are 5% of NFTs that are actually quite valuable. Bored Ape NFTs, for example, are trading quite well, with Bored Ape Yacht Club NFTs averaging around $42,000.

Those who know a thing or two about cryptocurrencies have experienced similar situations many times. Bitcoin has been declared dead countless times, but it still exists and continues to grow. It has millions of supporters and its current price is over $28,000, proving that it is not worthless.

While the market will have its ups and downs, it would be unwise to think that a technology as useful as NFT will disappear altogether.NFT serves as both a non-physical and physical digital wrapper, allowing for tracking and trading. It is a concept with broad applicability, not limited to the art market.

So what exactly caused the NFT market to collapse?

1.The market is saturated and lacks a link to value. Before the NFT boom in 2021, there were only a handful of Web3 items being traded, but as collector interest in NFT surged, so did the number of items traded, and in 2021, at the height of the NFT boom, over 1.5 million NFT items were traded in a single month, ranging from music to games, to visual artifacts.

This incredible expansion has come at the cost of saturating the market. Neither collectors nor investors have thought carefully about the value of NFT as a technology carrier.

2. Rampant fraud. When people are willing to invest millions of dollars in an unregulated market, hackers will naturally appear, and soon after the NFT boom, many collectors inadvertently clicked on malicious links or were scammed into purchasing free cast NFTs, losing their assets overnight.

As a result, many collectors stopped investing in new projects or even left the NFT market for good.

3. Collapse of large systems. Many large Web3-related systems contributed to the rapid expansion of the NFT market, but their collapse also impacted the entire industry. For example, FTX, the world’s second-largest cryptocurrency exchange, declared bankruptcy last November after a lack of liquidity caused investors to withdraw hundreds of millions of dollars in assets.

In May last year, TerraUSD, the world’s third largest stablecoin, and LUNA, its sister coin, collapsed, dropping 99% in value and causing investors to lose more than US$60 million. This, along with other events of a similar nature, contributed to the collapse of the NFT market.

4. Impact of the international economic situation. As the world slowly emerges from the quagmire of the epidemic, the economies of the United States and China are slowing down dramatically in 2022, and many experts even believe that they may enter a recession. Coupled with the emergence of inflation, last year’s inflation rate in the European Union even reached an all-time high of 9.2%, inevitably changing the consumption habits of NFT investors and the path of creators to market.

Regardless, in-depth research is still required before making an NFT investment in order to prevent fraud and to make a long-term wise investment that will outlast the volatility of the NFT industry.

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Lastly, Let me ask you, assuming you have the money, would you buy NFT? Please leave me a message.

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