(Hypebot) — Promoters of NFTs promised that they would ‘revolutionize the music industry’ and provide a much-needed funding source for musicians.
While I never quite drank a full glass of the Kool-Aid, I admit to being impressed by the potential of NFTs and publishing dozens of articles by myself and others sharing success stories and encouraging artists to explore them.
At its peak in August 2021, the NFT market was valued at more than $17 billion fueled by an estimated 23 million investors jumping on the virtual bandwagon.
The NFT Dream is Officially Dead.
A new study of 73,257 NFT collections by dappGambl, a community of finance and blockchain technology experts, found that 69,795 have a market cap of zero Ether (ETH), the second-most-popular cryptocurrency behind Bitcoin.
95% of NFTs are worth nothing. Zero. Nada.
This once $17 billion market is now worth, at best, $80 million, or 3% of peak valuation.
Even the vast majority of NFT collections from established creators that originally sold for hundreds of thousands of dollars are effectively worthless. 18% of these top collections now have a floor price of zero, and 41% are priced between $5 and $100. Less than 1% of these NFTs are priced over $6,000.
Today even “projects that lack clear use cases, compelling narratives, or genuine artistic value are finding it increasingly difficult to attract attention and sales,” the study’s authors wrote.
OpenSea poured fuel on the NFT funeral pyre
Last month OpenSea, the largest NFT marketplace, poured fuel on the NFT funeral pyre with the announcement that it would make the collection of promised NFT resale royalties optional.
The ability to collect a 5-10% royalty on future resales was one of the main benefits touted by those who promoted NFTs as a panacea for musicians. That promise of future income was particularly attractive to emerging artists whose value might increase as their careers progressed.
Read the full report: “Dead NFTs: The Evolving Landscape of the NFT Market.”
Bruce Houghton is the Founder and Editor of Hypebot, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a Berklee College Of Music professor.
