The crash of the NFT market

These days one does not hear many breathless reports of new NFTs (non-fungible tokens) being sold for huge amounts and being touted by celebrities. There is a reason for this. This site has examined the state of the NFT market and found that they have crashed in value with most of them now worth nothing.

The hype around NFTs peaked in the 2021/22 bull run that saw nearly $2.8 billion in monthly trading volume recorded in August 2021. From this, NFTs captured the collective imagination worldwide with multiple news reports of million-dollar deals for sales of certain NFT assets.

People were excited about this new type of online asset and something of a goldrush appeared to start. Fast forward to today… and the NFT market is starkly different.

Data from the Block reveals a weekly traded value of around $80 million in July 2023, just 3% of its peak back in August 2021.

Using data provided by NFT Scan, we have compiled a comprehensive analysis of over 73 thousand NFT collections (73,257, to be exact) in order to identify key trends, assess the health of the market, determine the factors contributing to successful projects, and hopefully gain insights into the potential future trajectory of the NFT ecosystem.

The results were shocking, to say the least.

Of the 73,257 NFT collections we identified, an eye-watering 69,795 of them have a market cap of 0 Ether (ETH).

This statistic effectively means that 95% of people holding NFT collections are currently holding onto worthless investments. Having looked into those figures, we would estimate that 95% to include over 23 million people who’s investments are now worthless.

The author of this report says that supply of NFTs have greatly exceeded demand, leading to the crash. They also point out that there are greater costs than just the loss to investors because NFT production uses a huge amount of energy.

The minting process of NFTs involves certifying a digital asset as unique by making a transaction on the blockchain. Each minting consumes energy, just as any other operation in the digital realm does, though the amount of energy consumed by minting NFTs with little to no use case might be cause for alarm.

To give a sense of scale, our study identified 195,699 NFT collections with no apparent owners or market share. The energy required to mint these NFTs is comparable to 27,789,258 kWh, resulting in an emission of approximately 16,243 metric tons of CO2.

Those are some big numbers, so let’s contextualize that… 16,243,017kg of CO2 is 16,243 metric tons, which is equivalent to:

  • The yearly emissions of 2048 homes – it’s 7.93 per home according to the EPA.
  • The yearly emissions of 3531 cars – it’s 4.6 per car according to the EPA.
  • The carbon footprint of 4061 passengers flying from London (England) to Wellington (New Zealand) – it’s 4 tons of CO2 per person according to Air New Zealand.

The author acknowledges that looking at the state of the overall NFT market may be unfair, like looking at the entire range of regular stocks on offer since many stocks are for low-performing companies and their prices are also close to zero. The state of top performing stocks like those in the S&P 500 index may be a better indicator of the state of the market. But even looking at the top NFT performers, there are problems.

A startling 18% of these top collections have a floor price of zero, indicating that a significant portion of even the most prominent collections are struggling to maintain demand.

Furthermore, 41% of the top NFTs are modestly priced between $5 and $100, which may signal a lack of perceived value among these digital assets.

Astonishingly, less than 1% of these NFTs boast a price tag of over $6,000, shedding light on the rarity of high-value assets even within the cream of the crop.

This is a complete departure from the million-dollar deals that were heavily reported during their boom.

These statistics not only underline the disparity within the top echelons of the NFT world but also serve as a stark reminder that, despite all the glitter and allure, genuine value in this market can be elusive.

The author of this report has not completely given up on NFTs though, and says they may have a future once all the hype is gone and they move on from just representing art and collectibles to having some practical uses.

Maybe. But I will continue to steer clear of them and the associated cryptocurrency markets.


  1. Dunc says

    It’s important to remember that “the million-dollar deals that were heavily reported during their boom” were mostly fake. Celebs and influencers were paid to buy these things by the people who were selling them. Some exchanges didn’t even check that the buy and sell sides of the transaction were different accounts -- you could literally “buy” something from yourself, with no money (or even pretend money) moving anywhere, but the “sale” would still appear in the stats and allow you to claim the token in question was “worth” the amount of the imaginary transaction.

  2. Matt G says

    I saw a relevant single-pane comic recently. A person is looking at a bottle in a drug store and says to their friend “the active ingredient is marketing.”

  3. birgerjohansson says

    A lump of gold at least represents the considerable effort it takes to dig it up from deep, uncomortably warm veins of ore underneath South Africa.

    The price of gold fluctuates, but it will not reach zero, except in a post-apokalyptic scenario.

    NFT is a worldwide variant of the stupidity that got Albania involved in a pyramid scheme.

  4. birgerjohansson says

    Denmark has taken a different road to riches the last few years.
    Instead of investing in pyramid games, they have invested into providing something many people need: semaglutide, the weight-loss substance.*
    Of course, this course requires decades of research and investment, anathema for the get-rich-quick crowd.

    *it has some side effects. Despite its proven effect, I am not lining up for it.

  5. birgerjohansson says

    In the context of unregulated robber barons stealing from the rest, here is suggested reading.

    I would like to plug Harold Wilensky’s book “Rich Demicracies” where he compares the USA with many other succesful demicratic countries; Japan, Israel (the “democracy” part is problematic), Canada, New Zeeland and several western European countries.

    It is possible to organise society in another way than America, even if Fox News would scream that means communism.
    Wealth *can* be accumulated without becoming Gordon Gekko.

    (a reference to a film back when MTV was good and nobody thought Dubya might be president)

  6. says

    The author of this report has not completely given up on NFTs though, and says they may have a future once all the hype is gone and they move on from just representing art and collectibles to having some practical uses.

    Such as…? (Well, we’ve already seen them used for money-laundering, but what else is there?)

  7. John Morales says

    Raging Bee: “To weather market downturns and have lasting value, NFTs need to either be historically relevant (akin to first-edition Pokémon cards), true art, or provide genuine utility.”

    “Here are just some of the many examples of practical uses for NFTs: [6 categories provided]”

    (From the featured link)

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