The bubble of NFTs has popped. Within the last several months, the market for non-fungible tokens has taken a nosedive with some digital art pieces losing 97% – 99% of their value. Millions have been lost by investors who bought NFTs at peak popularity according to dappGambl’s report.
NFTs were seen as the future for arts and collectables when they first came into prominence through collections like CryptoPunks and Bored Apes. And it wasn’t just celebrities such as LeBron James or Justin Bieber who got involved – they even made appearances in pop culture events like this year’s MTV Video Music Awards.
In May 2022, all NFTs had a combined market capitalisation of $526bn but now sits around $18bn – meaning nearly $508bn has been wiped off the sector, equivalent to about 97%.
Early pioneers of crypto art like CryptoPunks and EtherRocks have borne much of this devaluation. For example, at one point a CryptoPunk #5822 sold for 8k ETH ($23.7m) but would get about $12-13m today. Even icons among icons have not been spared.
High-Profile NFT Losses
An EtherRock #93 sold as a bit of fun during wild times in NFT speculation for 420 ETH ($1.8m), it’s worth half that now; while a rare golden furred Bored Ape Yacht Club Ape #8817 went for $3.4m but recently fetched just 275 ETH or $665k.
However it’s more than individual losses: around 95% of NFT collections are now effectively worth zero with some market caps hitting zero too – indicating investor sentiment towards them has changed dramatically indeed.
Yet proponents argue that there’s more than meets the eye with these tokens; they have artistic and cultural value beyond being mere investment assets. They claim that the underlying blockchain technology is strong and can be used for anything from managing digital identities to tokenising real estate.
But for now, it seems this version of “profile picture” NFTs has failed spectacularly. Some say in order to keep up this momentum, they need to become something more than just a collectable on your phone or computer screen – they need utility and cultural significance that could change how we interact with digital assets during this blockchain era.
This should be another cautionary tale about what happens when you deal with speculative investments within volatile markets around different forms cryptocurrencies or tokens alike; it’s been one hell of an NFT landscape already, and this latest turn only adds fuel to the fire.
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