Last week, a majority of the world learned that 95% of non-fungible tokens are worthless. You know who already knew this? Everyone is still following NFTs.
Over time you get a feel for the market and develop a sixth sense for how it moves, what moves it and what has value. Years of experience have taught us that the NFT market moves in cycles, with the hot side of the market usually lasting only a few weeks, although the start of the calendar year usually lasts a few months.
Between these runs, most NFTs become completely illiquid and fade into obscurity. When the next cycle arrives, they will be replaced by a whole new set of NFTs. If I were a betting man, I’d say probably 95% of NFTs become worthless between these cycles. That number will only grow as more and more supply arises.
There is a much more important story to tell about the NFT ecosystem than the “95% worthless” story that everyone is distracted by. It is that 94% of the market value has disappeared. Let me ask a few questions to demonstrate why this matters.
Would you measure the stock market by the number of shares worth one cent or less, and use bankrupt and bankrupt companies to represent the total market value? If I told you that the value of IBM, Microsoft, Apple and NVIDIA had fallen by 95%, wouldn’t that be more remarkable?
That’s the real story in NFTs and it’s exactly the story that the Forkast 500 NFT Index has been telling us all year. The top 500 NFT collections on blockchains represent the majority of the NFT market’s value, so measuring them as a proxy of the market, like the S&P 500 is a proxy of the stock market, is the best way to gauge its health of the NFT to measure. economy. This index reflects that the NFT market has lost almost 94% of its value since its peak in 2022.
Most of us don’t think this is bad news, especially if you believe NFTs are already overvalued. But if we measure the value of NFTs from their peak value to today, let’s also measure from the beginning, when NFTs were also worth almost nothing. If you compare the data from 2020 to the still incomplete 2023, we find some pretty illuminating facts.
2020 compared to 2023
In 2023, unique buyers have already increased by 10,100%, turnover by 31,837% and total transactions by 52,304%, while trading profits have decreased by 64,999%. Perhaps most importantly, collectors and traders have for the most part not abandoned the NFT economy, even though trading profits are nowhere to be found. People believe in the technology, and they believe in the future that NFTs will provide the power.
The conversation has changed significantly now, so let’s reset the room.
Has the value of the NFT ecosystem fallen from its peak? Yes.
Are NFTs still a world-changing technology? Yes.
View the graphs
Source: CryptoSlam
Last week was the fifth week of declining NFT sales, but like last week, there appears to be some stabilization overall. This week’s numbers still keep us largely in line with the action we saw in May and June 2021, and the next milestone would drop to the $30 million to $55 million we saw in early 2021.
- DesignKings, DMarkt, Gods unleashed, So rare. “The Four” rounded out the top four this week, collectively representing about 30% of last week’s total NFT sales volume.
- Reavers’ new mint gives Solana his first top ten collection since Tensorians made the elite list exactly 1 month ago.
- Nakamigos supplied them Cloaks mint as a free claim for holders, and the remaining unclaimed NFTs were sold for 0.05 ETH. The secondary market caught fire, with NFTs leading on average $276 on September 24.
- Bored Ape Yacht Club features the week’s top collectible NFT sale with BAYC #3149 sold for US$221,000.
- Ethereum is the real king of NFTs (sorry DraftKings), almost outselling the other top ten collections, which combined for just over $38 million in sales.
- Polygon DraftKings has kept the blockchain front and center, with 73% of Polygon’s revenue coming from sports collectibles.
- Solana had a pair of new collections, Reavers and Clear Collectibles, that generated attention and trade action last week.
- Mythos’ DMarket continues to see most of its volume driven by gaming skins. Check out S4mmy.eth’s X-thread explaining the revolutionary CS:GO NFTs.
- Bitcoin The creator of the Ordinals proposes a change to the Ordinals numbering system, along with a replacement for BRC20s called Runes. This is causing a lot of debate in the community as the implications could impact the value of existing collectibles.