The NFT boom is deflating. Or rather the bubble that was created around them. The analysis firm Nansen ensures that a third of the NFTs analyzed have no or very little transaction volume. That is, one-third of NFTs, barring sudden surges in popularity, are dead, because no one – or very few people – trade with them.
This does not necessarily imply that these NFTs are worthless. A painting, even if it is not frequently exchanged and remains in the hands of the same person for years, retains its value. This same logic could apply to many NFTs.
Nansen’s data also reveals another curious reality. Another third of NFTs analyzed are trading below their quoted value. That is to say: those who acquired it at the time of its launch would lose money if they decided to resell it today.
the database analyzed by Nansen is composed of 8,400 collections with a total of 19.3 million NFTs in the block chain of Etherum. A large enough sample to draw general conclusions about current market dynamics.
That doesn’t mean NFTs are doomed
This reality does not mean that all NFTs are worthless or that the technology behind them has no potential both now and in the future. But that seems to reflect something many pundits have been pointing out for months: a huge percentage of the market is made up of meaningless projects.
“The money is flowing too fast and with too much ignorance,” WhaleShark, one of the world’s biggest collectors, said in statements to Bloomberg. A feeling that remember what was experienced in 2018 with ICOswhen thousands of projects raised large sums but, soon after, ended in failure.
In the past 30 days, in addition, the volume of transactions with NFTs has decreased significantly. More precisely, 40% compared to the previous month, as also indicated Nansen. On OpenSea, the largest NFT trading platform, volume fell further: 67%, according to DappRadar data compiled by Bloomberg.
Many describe this dynamic as cooling or corrective moves after several months in which the NFT market has gone completely crazy both in terms of informative relevance and volume of money. Anyway, what seems to be a fact is that this sector is going through a turning point.
I am Bhumi Shah, a highly skilled digital marketer with over 11 years of experience in digital marketing and content writing in the tech industry.