Rollingstone.com hit the traffic block today with an attention-grabbing post calling for the end of non-fungible tokens (NFTs). The piece, “Your NFTs Are Actually – Finally – Totally Worthless,” picks up a new study from dappGambl, a community of financial experts, and runs hard with it. And it struck a chord. At the time of writing (Thursday afternoon), the post is top-trending on their website and on Google itself. Type the term “NFTs” into your browser and it will appear at the top of the search results.
Sure, there’s plenty of meat here and the headline isn’t entirely wrong, at least judged by the loose standards of headlines. It’s more or less true that most NFTs are indeed worthless. The research found that, from a sample of 73,257 NFT collections, 69,795 have a market capitalization of zero ETH. That’s 95% of the total, which is almost “all”. The research shows that 23 million people now own NFTs with no value, which is certainly difficult for these investors.
“Only 21 percent of the collections included in the survey can claim full ownership, meaning that about four in five collections remain unsold,” notes writer Miles Klee. “As buyers become increasingly discerning, ‘projects without clear use cases, compelling stories or real artistic value are becoming increasingly difficult to attract attention and sales.’”
But are NFTs really dead, as the post suggests? Not exactly.
While trading volumes are certainly down, they are not non-existent. Data collected by The Block shows that trading reached about $63 million last week. That’s a far cry from the $360 million-plus weekly volume we saw in February. But it’s not nothing either.
Moreover, there is the 5% of collections that are actually worth something. The post says the study explains why “you don’t see ugly cartoon monkeys hanging around the internet as often anymore.” But Bored Ape NFTs are actually trading respectably. The average price of a Bored Ape Yacht Club NFT is approximately $42,000.
More important than the precise trading dynamics is what the report shows about how the mainstream media generally works. Publications look for extremes, absolute highs and lows that make for catchy headlines. Last November, Rolling Stone published the headline: “The NFT Bubble Has Burst, But the Value for Creators is Only Growing.” Last summer, it loudly touted its own partnership with… one of the most famous NFT collections out there, the Bored Ape Yacht Club. “This is a rare opportunity for the public to take home a work of art from BAYC with Rolling Stone’s stamp of approval,” the promo piece said. Now Rolling Stone has the opposite message, also filled with exaggerations.
Anyone who has been into crypto for a while has seen this movie many times. Bitcoin has been depreciated countless times, but blocks are still coming out. It has millions of followers and the price is now $26,000 plus, which again is not nothing.
Sure, there have been highs and lows, but the idea that a technology as useful as NFTs will disappear completely is foolish. NFTs are a digital wrapper for non-physical and physical items, allowing them to be tracked and traded. That’s an idea with broad applicability, whether it’s reflected in art markets or not.
The bigger story here is that media publications are losing credibility because they disingenuously look for extremes when the real world is full of nuances. As a result, many in the crypto world have “already started tuning the news cycle,” as my colleague Dan Kuhn recently wrote about this phenomenon. People build and develop and ignore whether the media says the world is going up or down. Their reality is not framed by what some journalist somewhere says it is; they look at technology and turn it into something useful. And thank goodness they do.