A recent report revealed the critical state of the non-fungible token (NFT) market in 2024. According to experts, 96% of more than 5,000 existing NFT collections are considered 'dead.' This means they have zero trading volume, no sales for more than seven days, and no activity on the X network.
End of an Era
NFTs from popular collections bought in the wave of excitement in 2022 are being sold at colossal losses. For example, Arkham Intelligence reported that NFTs purchased by pop star Justin Bieber in 2022 for $2 million are now worth just over $100,000, a loss of 94.7%. Additionally, in August, Deepak Thapliyal, owner of the most expensive CryptoPunk #5822, which was bought for 8,000 ETH ($23.7 million at the time) in 2022, got rid of the asset without disclosing the sale price. The community suspects that the token was sold at a loss.
The Rise and Fall of OpenSea
In January 2022, the total volume of non-fungible tokens peaked at over $6 billion. By July 2024, it had fallen below $430 million. OpenSea, once the largest NFT marketplace, is in even worse shape. The company's valuation fell from $13.3 billion to $1.4 billion after one of its largest investors, New York venture capital firm Coatue Management, overvalued its stake in the crypto startup by 90%, from $120 million to $13 million. Despite this, the company still has $438 million in cash and $45 million in crypto reserves as of November 2023.
What will happen to the NFT market?
The NFT market has long been limited to platforms like OpenSea or Rarible, where users can issue new NFTs or trade them with others. There are also lending services or platforms for trading derivatives on NFTs from major collections, allowing users to speculate on NFTs without owning them. However, bearish trends in the non-fungible token market persist, as evidenced by the rapid decline in prices of NFTs from blue chip collections.
Experts emphasize that the non-fungible token market is in decline, and investors in this segment must act cautiously. NFT creators should also reconsider their approach to project implementation.
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