NFTs Are Down Bad, But Not ‘Worthless”

In a recent article, Rolling Stone, a prominent mainstream media outlet, proclaimed NFTs as “completely worthless.” Their statement was based on the results from a dappGambl study examining the changing dynamics of the NFT landscape. The research revealed a concerning statistic: approximately 95% of NFTs, held by over 23 million investors, have seemingly lost all their value.

While these numbers paint a bleak picture, categorizing the entire NFT market as “dead” or “worthless” may be a stretch.

This isn’t the first time that society and the media have hastily proclaimed the downfall of previously celebrated trends, seemingly “kicking us when we’re already down.” While we can admit that yes, the market is in a slump, floor prices are down, projects have rugged, and your favorite project isn’t selling at millions of dollars, the market is still moving. According to data from CryptoSlam, over $79 million in NFT trading volume has been done this past week alone, which isn’t nearly as much as the volume being traded in the bull run but can’t be entirely overlooked. Along with notably high sales within the last 30 days, including a 500 ETH ($809,043 USD) Mega Mutant sale.

Following the article’s release, the community’s reactions have been diverse. While some concur with the report’s findings, others stand by the community, understand the mainstream sentiment, and many disagree with it.

“98-99% of NFT projects will go to zero.”

For those who were on the front lines at the peak of the NFT bull run, some may remember entrepreneur and Veefriends founder, Gary Vaynerchuck, persistently preaching that “98-99% of the current NFT pfp projects will go zero. In an article written by Gary Vee in December of 2022, he addressed his earlier predictions about the decline of most NFTs. Gary highlighted several reasons for his skepticism: the oversaturation of the market with numerous NFT projects, many of which were driven by short-term greed rather than long-term vision; the involvement of individuals with little understanding of business or community-building, leading to poorly managed NFT projects; and the overwhelming trend of projects being launched for quick profits rather than lasting value.

Drawing parallels with the dotcom bubble, he believed that while many projects will inevitably fail, a select few will thrive and become mainstays in the industry. He stresses the importance of investing in projects with solid foundations and leadership and reminds readers that technological advancements often face skepticism before becoming widely accepted.

The initial allure of NFTs stemmed from their unique nature, where each digital asset could prove its rarity and originality on the blockchain. This, combined with celebrity endorsements and high-profile sales, catapulted NFTs into the limelight. However, like many innovations, it’s not uncommon for there to be a significant drop after an initial surge. The current market decline we are seeing can be attributed to many factors, and is much more nuanced and complicated than simply declaring NFTs as “worthless.”

It’s Too Soon to Declare NFTs “Dead”

Recently, the NFT sector has faced intensified regulatory scrutiny from the SEC, as highlighted by cases like Stoner Cats facing charges. Such incidents raise questions about the long-term viability of digital assets, especially concerning their fate should a related company be dissolved. This regulatory pressure might be a contributing factor to the current market downtrend in NFTs. Additionally, the ambiguous regulatory landscape might continue to deter potential investors from entering the space until clearer regulations are established.

Yet, NFTs, while currently renowned for art and collectibles, are expanding into sectors like real estate, gaming, and intellectual property, promising potential long-term market stability. Their revolutionary capacity to validate digital ownership and authenticity only underscores their potential. Like all nascent markets, NFTs may be witnessing a decline now, but as they mature, stabilization is likely. It’s pivotal to note the global intrigue they’ve sparked in a brief period, indicating their continued relevance despite transient market fluctuations.

In short, regardless of mainstream media’s narrative, NFTs, anchored by the blockchain, are here to stay.