NFT Market Collapses

The NFT bubble has burst.

An ambitious spinoff of the cryptocurrency craze, NFTs were meant as a kind of digital trading card. Each one was one of a kind, and the appeal of being the only person who owned a particular digital item added to their appeal.

NFTs, by design, have a nominal value of zero. NFT stands for non-fungible token. “Token” refers to the digital nature of the NFT. “Non-fungible” refers to the lack of inherent value. The lack of value was a way to place NFTs outside of the scope of laws that set standards for trading in things that are meant to hold value.

Instead, uniqueness was supposed to be the appeal of an NFT. In perhaps the best use case for the medium, the holder of the NFT associated with a specific painting was essentially the sponsor or benefactor of that painting.

NFTs got a lot of hype in 2021, but hype can’t last indefinitely, and as 2023 arrived, the talk had faded to virtually nothing. As the talk died down, so did the value of NFTs. Recent market measures and surveys suggest that NFTs are essentially worthless now.

For example, of all the NFTs ever put on the market, only 1 out of 5 has ever sold. The vast majority still belong to the “artists” who created them. Among those that have sold the median value is now 0. Among those that have sold and still retain value, the mediam value is around $5.

The market is not completely gone, though. One percent of NFTs that have sold still have a value of at least $6,000. Still, that is a long way down from the million-dollar price tags that many of the NFTs once sold for.

There probably is a place for NFTs, but the current consensus of market observers is that no one knows what that ideal use case might be.

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