96% of NFT collections are considered ‘dead’

NFT Evening analysts say 96% of the 5,000 NFT collections will be dead by 2024.

The report reveals the state of the non-fungible token market and its problems in 2024. According to experts, 96% of the more than 5,000 existing NFT collections are ‘dead’. This means they have no trading volume, no sales for more than seven days, and no activity on social network X.

Source: NFT Evening

Analysts note that 4 out of 10 NFT owners currently need to make a profit from their tokens. At the same time, the average lifespan of collections is 1.14 years. This is 2.5 times less than the same indicator for classic crypto projects.

Additionally, 2023 was a record year for NFT collapses. During this period, almost 30% of projects from this segment fell into the ‘dead’ category. According to experts, 44.5% of NFT owners are facing losses.

Source: NFT Evening

The NFT Evening Team also identified the most profitable collection to date. It turned out to be the Azuki project, which increased the investments of token owners by an average of 2.3 times.

“This success can be attributed to the collection’s strong community involvement, unique artistic appeal and effective marketing strategies.”

The experts also named the most unprofitable NFT collection: Pudgy Penguins. It experienced a 97% decline in value, making it the current record holder for a decline in owner income.

Experts emphasized that the non-fungible token market has declined and investors in this segment should act cautiously. Furthermore, experts believe that NFT creators should rethink their approach to project implementation.

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End of an era

NFTs from popular collections bought on the wave of excitement in 2022 are selling at huge losses.

For example, Arkham Intelligence has calculated that NFTs that pop star Justin Bieber bought worth about $2 million in 2022 are now worth just over $100,000. Losses reached 94.7%.

The singer’s wallet initially received $2.34 million worth of Ethereum (ETH). The majority of the amount, $1.86 million, went to the purchase of two Bored Ape Yacht Club (BAYC) and a pair of Mutant Ape Yacht Club (MAYC). The wallet also included tokens from the World of Women, Doodles, Otherdeed and Metacard collections. Since then, assets have lost between 89.7% and 97.4% in value.

Moreover, Deepak Thapliyal, the owner of the most expensive CryptoPunk #5822, who bought the token in 2022 for 8,000 ETH ($23.7 million at the time of the transaction), sold the asset in August without disclosing the sale price . Amid the industry excitement, the deal became the fourth most expensive of all NFTs in 2022.

The community suspected that the token was sold at a loss. The buyer was reportedly user X, who goes by the nickname VOMBATUS. The token was reportedly purchased for 1,500 ETH (~$3.9 million), 80% cheaper than its previous price.

The rise and fall of OpenSea

In January 2022, the total volume of non-fungible tokens peaked at over $6 billion. As of July 2024, it had fallen below $430 million. NFTs are still alive, but they are in bad shape.

OpenSea, once the largest NFT marketplace, is in an even worse situation. The Verge notes that claims from the Securities and Exchange Commission and the Federal Trade Commission, U.S. and international tax authorities, are causing increased competition, allegations of discrimination and employee layoffs.

Additionally, OpenSea’s valuation fell from $13.3 billion to $1.4 billion after one of its largest investors, New York venture capital firm Coatue Management, overvalued its stake in the crypto startup by 90%, from $120 million to $13 million.

However, The Verge notes that the company still has some steam left. An internal document shows that OpenSea had $438 million and $45 million in crypto reserves as of November 2023. It expects that with this capital and a new business model it will be able to overcome difficult times.

“According to an internal document, the company had $438 million in cash and $45 million in crypto reserves as of November 2023, and it continues to rely on that capital in the hope that a ‘2.0’ pivot will help it navigate choppy seas. ”

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What will happen to the NFT market?

The NFT market has long been limited to marketplaces like OpenSea or Rarible, where users can issue new NFTs or trade them with others.

There are lending services or platforms for trading derivatives on NFTs from large collections, allowing users to speculate on NFTs without owning them.

However, the bearish dynamics in the non-fungible token market persist, as evidenced by the rapid decline in the prices of NFTs from the blue chip collections.

Read more: Magic Eden dominates the NFT market while its share is almost 37%: CoinGecko