Q9 Weekly | Monkey See, Monkey Do

5 min readSep 28, 2023

28 September 2023

· 95% of NFTs ‘are now worthless’
· NFT trading volumes hit multi-year lows
· Future use cases of nun-fungible assets

Are NFTs dead?

In 2021, the non-fungible tech trend swept up artists and celebrities, with digital art and monkey jpegs exchanging hands for eye-watering sums of money, and ‘NFT’ being crowned word of the year by Collins Dictionary.

However, a new report shows that 95% of NFTs ‘are now worthless’ and 23mn people hold worthless assets.

[Link to this https://www.q9capital.com/en/saas ]

The report by dappGambl is called Dead NFTs: The Evolving Landscape of the NFT Market… and according to the research, 69,795 out of 73,257 NFT collections have a market cap of 0 Ether, leaving 95% of those holding NFT collections — or 23mn people — with worthless investments.

dappGambl’s study shows 79% of all NFT collections currently remain unsold, and the surplus of supply over demand has created a buyer’s market that isn’t doing anything to revive enthusiasm.

Source: dappGambl

Even filtering out the lower-value, less significant projects, most collections have little value today. They found that 18% of these top collections had a floor price of zero, essentially being worthless. Forty-one per cent of the top collections had been priced between $5 and $100, which indicates a lack of perceived value attached to these particular assets.

Moreover, less than 1% of the collections were worth more than $6,000, a stark shift from the million-dollar deals that dominated a $22bn market in 2021.

Source: dappGambl

NFT trading volumes have also hit their lowest levels in years: $1.4bn of weekly volume in April 2022 to just $60mn volume this week, raising questions about the ecosystem’s vitality.

Trading Volumes of NFTs Has Plummeted

Source: Dune Analytics

The Number of Weekly Sales Has Also Tumbled

Source: NonFungible

The report also addresses another big concern surrounding the NFT boom: its environmental impact. Minting and trading non-fungible tokens is a process that requires a lot of energy. The report observes that the nearly 200,000 NFT collections “with no apparent owners or market share” caused carbon emissions equivalent to the annual output from 2,048 houses, or 3,531 cars.

Source: dappGambl

This daunting reality should serve as a sobering check on the euphoria that has often surrounded the NFT space. Amid stories of digital art pieces selling for millions and overnight success stories, it is easy to overlook the fact that the market is fraught with pitfalls and potential losses.

The 2021 hype was ultimately bound to fail. Rather than being used for the true potential the technology can unlock, NFTs for the most part were used to sell jpegs of monkeys, punks, rocks, and sometimes the odd lion.

Source: Bored Ape Yacht Club

Yet while the situation does look bleak, NFTs do have a viable future.

NFTs can be so much more than a vehicle for exchanging pretty pictures. Practical use cases are found across gaming, ticketing, music, digital identity, financial instruments and fractionalisation.

And while today’s market is showing lower volumes, activity and royalty fees — brands are still piling in. Just in the last week Walmart, Formula One, Louis Vuitton, and PSG announced projects in the space.

Whilst its down, the space is far from dead. As the market matures, NFTs are likely to increasingly pivot from mere collectibles to assets with tangible utility and significance. In this ever-evolving space, the future of NFTs should be shaped not by speculation, but by genuine value and utility that they bring to their holders.