If you were kicking yourself last year for not getting in on the NFT craze, we’ve got good news…
…but if you have a stockpile of Bored Apes collecting digital dust, maybe skip to the Saturday crossword.
Driving the news: A new report from crypto company dappGambl found that ~95% of all NFTs are now essentially worthless, with ~23 million people holding onto these “assets.”
Zoom out: Even the “more valuable” collections are still not very valuable. Looking at the top ~12% of NFT collections by market capitalization:
- 18% are essentially worthless.
- 41% are priced from just US$5 to $10.
- <1% are priced at over US$6,000.
Catch-up: In case you’ve forgotten, NFTs, or non-fungible tokens, are blockchain-backed digital tokens (often artworks), each with a unique ID that hypothetically gives them value.
- During the peak of the craze in early 2022, monthly NFT trading exceeded US$17 billion, with scores of celebs hawking cartoon images, with some selling for millions.
- NFT trade on the Ethereum blockchain is at its lowest level in over two years. Active monthly users on leading marketplace OpenSea have also hit two-year lows.
Why it matters: The rise and fall of NFTs offers a salient reminder of the dangers of hype cycles. Be it new tech like the metaverse or jumping into crypto on dubious trading platforms, we’re living in an era where questionable investments are disguised as revolutionary ideas.
Bottom line: So be vigilant, dear reader. And if a potential investment has a name like Stoner Cats… maybe park your money elsewhere.—QH
