The NFT boom is deflating. Or, rather, the bubble that has been created around them. The analysis firm Nansen assures that a third of analyzed NFTs have no or very little trading volume. That is to say: a third of NFTs, barring a sudden rise in popularity, are dead, as no one – or very few people – trades with them.
This does not necessarily imply that such NFTs are worthless. A painting, even if it is not frequently traded and remains in the hands of the same person for years, retains its value. That same logic could be applicable to many NFTs.
Nansen’s data also reveals another curious reality. Another third of analyzed NFTs are trading below their listed value. That is to say: those who acquired it at the time of its launch would lose money if they decided to sell it today.
The data set analyzed by Nansen is made up of 8,400 collections with a total of 19.3 million NFTs in the blockchain of Ethereum. A sample large enough to draw general conclusions about current market dynamics.
This does not mean that 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 it does seem to reflect something that many experts have been pointing out for months: a considerable percentage of the market is made up of meaningless projects.
“Money flows too fast and with too much ignorance,” said WhaleShark, one of the world’s largest collectors, in statements to Bloomberg. A feeling that remember what was experienced in 2018 with the ICOswhen thousands of projects raised significant amounts of money but, shortly after, ended up being a failure.
In the last 30 days, in addition, the volume of transactions with NFTs has fallen significantly. Specifically, 40% compared to the previous month, as also indicated Nansen. On OpenSea, the largest NFT trading platform, volume has fallen even further: 67%, according to DappRadar data compiled by Bloomberg.
Many describe this dynamic as cooling or corrective movements after several months in which the NFT market has gone absolutely crazy both in terms of informative relevance and volume of money. Be that as it may, what does seem like a fact is that this sector is going through a turning point.