NFTs Are Retaining Value, Researchers Say (2024)

FAQs

NFTs Are Retaining Value, Researchers Say? ›

Over 95% of NFTs created in the 2021-2022 NFT craze are now worthless, according to dappGambl researchers. However, upon closer inspection, the picture looks a bit different. The NFT market cap today is a robust $10 billion, driven by the 5% of NFTs that have retained their value.

Individuality and scarcity often drive an NFT's value. For instance, digital artworks, rare virtual items in games and other unique digital assets can be tokenized as NFTs, and their value is determined by the demand and willingness of buyers to pay a certain price.

Has the value of NFTs dropped? Yes, the value of many NFTs has significantly declined following their initial surge. This drop is attributed to various factors, including market saturation, decreased speculative trading, and shifts in the broader economic environment.

Crypto marketing firm DappGambl estimates that 95% of NFT's on the market are now worthless.

From my perspective, while there are factors that could encourage NFT adoption, a potential recovery likely won't resemble the 2021 hype, so I don't expect the charts to explode again. Instead of a few collections worth millions, there might be smaller NFT projects with more accessible prices and higher utility.

NFT collections will likely see retention rates around 100% after selling out because of their limited supply and an inability to “get rid of” the token in a similar manner to unsubscribing from a web2 product (because when one wallet sells and churns, another wallet must receive and be acquired into the collection).

At the most basic level, NFTs gain value whenever somebody is willing to pay more for them than the previous owner. Utility is key when it comes to NFTs preserving long-term value and sustainability. NFT teams may add extra perks or features for NFT holders over time to increase their value.

So, the NFT craze isn't over; it's evolving, and these legacy brands are leading the way. When you think of NFTs, you might picture digital art, collectibles, or virtual real estate. While these are indeed significant aspects of the NFT world, it's important to understand that NFTs have far-reaching potential.

A 2023 report from crypto analysis firm dappGambl found that 95% of NFTs are worth practically nothing. The report found that, following the immense hype over NFTs between 2021 and 2022, around 79% of all NFT collections have remained unsold.

Non-fungible tokens (NFTs) and ordinals are assets that are tokenized using a blockchain. Because blockchains use energy, NFTs can contribute to greenhouse gas emissions and climate change through their production, exchange, and storage.

What killed NFTs? ›

The value of NFTs is often tied to the value of cryptocurrency, especially Ethereum. As the crypto market went through a downturn, so did the buying power for NFTs. This, paired with the decline of digital spaces like the metaverse, have meant that people simply are no longer interested in the digital token business.

The NFT market grew significantly in 2021. And it is true that the market suffered from many flops and surges. Even though many users gave up on NFTs after this. There are still many users who remain loyal to the market and will continue investing in 2024.

While the vast majority of Americans are not ready to purchase NFTs, about 7 percent of non-owners said they'd be likely to purchase in the next 12 months. This equates to as many as 16.3 million potential customers. Only around 15 percent of people believe that NFTs are worth investing in at this time.

The good news is that the NFT itself (i.e. the token or certificate of ownership) can never cease to exist. However the file which it is associated with (e.g. digital art, etc.)

1. The Merge – $91 Million. The most expensive NFT sold is The Merge, the NFT collection created by digital artist PAK that was sold for $91,806,516 within just 48 hours following its release on December 3, 2021, on the NFT marketplace Nifty Gateway.

Non-fungible Token Market Growth & Trends

The global non-fungible token market size is anticipated to reach USD 211.7 billion by 2030, registering a CAGR of 34.5% from 2024 to 2030, according to a new report by Grand View Research, Inc.

Intellectual Property The main benefit of NFTs is that they allow individuals to own a piece of intellectual property. It is easier to track ownership of intellectual property when it is embedded in a blockchain. It is also easier to ensure that the owner of the IP is not infringing on other people's IP.

Rarity, popularity, usefulness and appeal play a pivotal role in assessing the value of non-fungible tokens (NFTs).

Ownership History – An NFT's worth depends on its issuer and prior owners. Tokens developed by notable people or companies have high ownership historical value. Influential people's NFTs may be resold to build traction. Social proof – Social validation linked with an NFT's project determines its worth.

This is because each NFT is rare, unique, and indivisible. So, when a digital asset is tokenized, it creates value since it is possible to prove its authenticity and ownership and can be bought and sold many times over. Of course, scarcity isn't the only thing that creates value in NFTs.