Surprise, surprise. NFTs, or nonfungible tokens, are now worthless. Hands up: who didn’t see that coming?
Let’s recall that an NFT is a digital thing — in this case an image — that could still be replicated and copied, but of which the owner, well, owned the artwork, via a token on a blockchain.
For a short while certain entrepreneurial so-called creators (of questionable artistic merit, let’s be honest) produced some mediocre digital art and made millions of dollars.
The Bored Ape Yacht Club NFT collection is the greatest example of this mind-boggling trend, in which fictitious art was overvalued, sold and resold. Cryptocurrency-focused website dappGambl has analysed 73,257 NFT collections and concludes that the “vast majority of NFTs are worthless”.
It found that 69,795 have a market cap of 0 ether. "This statistic effectively means that 95% of people holding NFT collections are holding onto worthless investments. Having looked into those figures, I estimate that 95% to include more than 23-million people."
Ouch.
But if all of those hapless investors are honest, they would acknowledge that NFTs were never worth anything. It was another tech fad that preyed on two of humanity’s worst characteristics: greed, and the fear of missing out (fomo). Perhaps fomo, more than anything else, made rational people — who knew they were buying something that was not unique, no matter how much the NFT hype claimed otherwise — invest in these ethereal nothings.
It preyed on two of humanity’s worst characteristics: greed, and the fear of missing out
By the time the talentless former US first lady Melania Trump released an NFT image of her eyes, called, wait for it, Melania’s Vision, you knew this trend was meaningless.
The dappGambl report reads: “The hype around NFTs peaked in the 2021/2022 bull run that saw nearly $2.8bn in monthly trading volume recorded in August 2021.” The report used data from NFTScan data infrastructure and the CoinMarketCap website, and says: “From this, NFTs captured the collective imagination worldwide, with multiple news reports of million-dollar deals for sales of certain NFT assets.”
But by July 2023 this weekly trading value had dropped to $80m, just 3% of its August 2021 peak, according to dappGambl.
Now the NFTs are worth nothing.
Two years ago, in March 2021, the first tweet by Twitter co-founder Jack Dorsey sold as an NFT for $2.9m. It was that kind of hype that propelled NFTs to absurd valuations.
Now that the bubble has been deflated, the rush of NFT-related press releases has also died. For this alone I am relieved, as will be thousands of other tech journos who are hit with as many desperate attempts for free publicity with every new social media trend.
Many alcohol and fashion brands tried to hop onto the bandwagon by launching their own range. But who wants to buy an image of a bottle of cider or a lipstick that can be cut and pasted for free?
It is a worrying sign that so many big brands think the way to market their product is with whichever new trend emerges. Remember the awkward fourth-industrial revolution nonsense before Covid?
Thankfully we’ve been spared the NFT drivel — until it makes a comeback, when more people will lose money buying worthless digital things because of, you know, fomo.
* Shapshak is editor-in-chief of Stuff.co.za and executive director of Scrolla.Africa
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