The NFTs market is falling. Insider found in their “Remember when NFTs sold for millions?” study.
95% of digital things may not have any value. The study found that most NFTs have no value anymore. Since 2021/22, when the most non-fungible tokens were sold, trades have dropped dramatically. People who used to back the market now fear it.
The study also shows that a large part of the NFT market uses pricing methods that have nothing to do with how these assets have traded in the past.
This gap between listed prices and actual sales shows that many sellers are hoping for another big interest boom in NFTs like the one in 2021, which may never happen again.
Read also: Meta removes Facebook, Instagram NFT functions amid Crypto turmoil
NFTs’ rapid rise: Studying the 2021–2022 market boom
NFTs are digital copies of art or collectables tied to a blockchain, usually Ethereum. Each one has a unique signature that can’t be copied. In 2021 and 2022, there was a big bull run on the NFT market. At one point, $2.8 billion was traded every month.
Millions of copies of Bored Apes and CryptoPunks were sold, and famous people like Stephen Curry and Snoop Dogg got in on the fun. During the rise, Bitcoin got as high as $70,000. Not too long ago, the crypto price was around $27,000.
In 2022, the bitcoin industry had a hard time. National Public Radio (NPR) said it could be a turning point when most people stopped caring about virtual currencies and looked at them with doubt and caution, or it could be a challenging time for a growing sector.
Bitcoin is now worth $27,223 and Ethereum is worth $1,630.99. This is down from $65,000 for Bitcoin and $4,700 for Ethereum. DappGambl says that most coins aren’t worth much, so the situation isn’t clear. Their data shows that 95% of NFT collectors have assets that aren’t worth anything. This means that over 23 million people have lost money.
DappGambl tells people not to get too excited about tokens and cryptocurrencies. Artists are in trouble because people don’t value them or want to buy their work.
21% of dappGambl’s collections are held by investors and collectors. Four out of five groups of non-fungible tokens can’t be used. This doesn’t mean that all tokens are fake or that people shouldn’t use them, but some groups of tokens may not be worth much.
Think about Melania Trump’s NFT, “Man on the Moon.” It goes against NASA rules and is not liked by many people. It cost $75, but in two months, only 70 people bought it. It’s unclear how something could ever be worth that much or more.
Melania Trump won’t be the only one with these symbols in 2023. Canon was late to get into the coin craze. Cadabra, a place where NFT pictures will be sold, hasn’t opened yet.
Innovative companies like Meta (which used to be called Facebook) gave up on NFTs in March. They gave up on their plan to join the “metaverse” in 2022.
If someone is starting to use crypto now, they should be prepared for things to go very wrong.
Popular tokens crashed like a bubble. Crypto and NFTs harm the environment since they use much energy to mint. Coal and fossil fuel generators supply much of this energy. Most crypto and non-fungible token owners have gained little.
Frauds and scams NFT
NFT scams and frauds are a significant issue due to the market’s popularity. Fake sales are one example. Scammers build fake listings for stolen or fictional digital assets. Scammers sell bogus NFTs to buyers via deceptive marketing and disappear with their money.
Token fraud includes phishing online schemes. Scammers imitate NFT marketplaces to steal private keys and personal data. It typically leads to cryptocurrency wallet theft or access to actual collections. Also, scammers steal digital art and mint NFTs under bogus ownership. Unsuspecting buyers lose money and face legal issues when stolen NFTs are sold.
Some parties buy NFTs and inflate their prices to sell them rapidly for a profit, leaving others with worthless tokens and losing money. Dishonest coders hide problems in decentralized marketplace contracts. After raising capital, they exploit these weaknesses and lose money.
Scammers pose as musicians, celebrities, or influencers to sell or give away bitcoins or steal personal information. Scammers misrepresent legitimate ventures to acquire investor money. Once compensated, they leave, leaving owners nothing.