New report reveals most NFTs have lost their value

NFTs, once hailed as the latest tech sensation that captivated celebrities, artists, and even Melania Trump, are now predominantly deemed valueless. A study by dappGambl, drawing from NFT Scan and CoinMarketCap, discloses that 95% of the 73,257 NFT collections, which translates to 23 million investors, now possess investments with no tangible worth.

NFTs (non-fungible tokens) authenticate and certify digital content ownership, whether images, videos, or texts. Their hype peaked when personalities rushed to acquire notable NFT collections like the Bored Ape Yacht Club and Matrix avatars. In exceptional instances, Sina Estavi paid $2.9m for an NFT of Jack Dorsey's first tweet, and Melania Trump unveiled an NFT collection titled "Melania's Vision" in December 2021.

However, the decline of the NFT market emphasizes meticulous scrutiny before committing to hefty investments. The report commented on the fleeting nature of NFT enthusiasm, stressing that a market rife with potential risks lies beneath the tales of million-dollar sales.

The findings further showcased that 79% of NFT collections remain unpurchased, a testament to the speculative nature of the NFT market. From the 8,850 prime NFT collections analyzed, 18% had no market value, while just under 1% were worth more than $6,000, a significant drop from the previous year's market landscape.

The environmental implications of NFTs were also highlighted. The minting of 195,699 NFT collections with no evident market share or ownership equated to 16,243 metric tons of CO2 emissions. To illustrate, this carbon output is akin to the annual emissions from 2,048 households or 3,531 vehicles or the carbon footprint produced by 4,061 travelers flying from London to Wellington.

The study also shed light on disparities in the NFT market, emphasizing instances where listed prices grossly exceeded actual sales values, indicating potential inflation and misalignment with genuine buyer interest.

However, in concluding remarks, dappGambl researchers posited that NFTs could still be pivotal. For enduring worth, NFTs should possess historical significance, be genuine artworks, or offer actual utility.