The NFT Market: Are Most NFTs Worthless?
There has been a lot of buzz surrounding non-fungible tokens (NFTs) lately, but the detractors are claiming that the majority of them are now essentially worthless. A recent report from crypto analysis firm dappGambl has shed some light on this, finding that a staggering 69,795 out of 73,257 NFT collections have a market cap of zero Ether. This means that the vast majority of NFTs are not even worth the data needed to load up each individual .JPG file. Furthermore, the data reveals that 95% of NFT owners have actually lost money due to their digital tokens being practically valueless.
Despite this gloomy outlook, there are still major companies that jumped on the NFT bandwagon last year and have yet to jump off. For these brands, it has become a trolley problem. They must decide whether to continue making NFTs in the hope that they have not wasted money on a speculative tech bubble, or to abandon the NFT space altogether. For example, GameStop was hyping up its NFT marketplace just over a year ago, but now the company is looking to exit the crypto market and shut down its NFT store this November, citing regulatory uncertainty.
Other companies have allowed their NFT projects to stall out. Skin and body care brand Nivea, for instance, has not mentioned NFTs since its “The Value of Touch” branded NFT drop. Anheuser-Busch, known for its Budweiser brand, released NFTs in 2022 to promote its non-alcoholic beer, but has not launched any new NFT projects since then. These companies, along with Samsung, which promoted its 8k TVs’ ability to showcase “realistic-looking NFT digital art,” may now seem out of touch compared to two years ago.
While some companies have remained silent about their continued exploration of NFTs, documents have recently emerged showing that CBS Studios filed a patent for more NFTs based on the Star Trek franchise. This was shortly before Recur, the company previously supplying NFTs for CBS, went under during the crypto winter. It seems that some brands are now utilizing NFTs to put products behind a paywall, essentially tokenizing exclusive access to certain perks or experiences.
However, it remains to be seen whether customers will be willing to spend money on these non-fungible assets. The NFT market has experienced a significant downturn, and many NFT drops have failed to gain traction. As a result, major brands may face a rude awakening if they continue to rely on NFTs as a primary revenue stream.
In conclusion, while there are still companies holding onto hopes of success in the NFT market, the prevailing sentiment is that the majority of NFTs are currently not worth much at all. With the market cap for NFTs on a steady decline and countless collections having no value, the future of NFTs remains uncertain. Only time will tell if the hype surrounding NFTs was just a fleeting trend or if there is indeed a place for them in the digital economy.