96% of NFTs are considered ‘dead’ as the market struggles with speculation and volatility

The non-fungible token (NFT) market has experienced explosive growth, followed by significant declines over the past few years. Despite the initial hype and heavy investment, it is now struggling with major instability.

According to a report by nftevening.com, a staggering 96% of NFTs are considered “dead” based on three factors: zero trading volume, minimum 7-day sales, and inactivity on Twitter.

NFT market decline

After examining more than 5,000 NFT collections and collecting 5 million NFTScan transactions, nftevening found that more than 4 in 10 or 43% of NFT owners are currently unprofitable. In addition, the average lifetime of an NFT is only 1.14 years, 2.5 times shorter than that of traditional crypto projects.

This short lifespan highlights the highly speculative environment of NFTs, where rapid price changes and the attractiveness of digital assets often fail to sustain long-term value.

nftevening said,

“The data paint a clear picture: the NFT market, previously lauded as the future of digital property and investment, is encountering significant difficulties. The high rate of non-return among holders, the stark contrast between collections successes and failures and the short lifespan of NFTs suggest that the market may not be the golden goose that many were hoping for.”

A closer look at individual NFT collections revealed a significant disparity in profitability. According to the platform’s findings, the Azuki collection is the most profitable, with holders earning more than 2.3 times their initial investment. This success is largely due to the collection’s strong community support, distinct art style, and strategic marketing efforts.

On the other hand, the Pudgy Penguins collection highlights the risks of the market, with a drastic loss of 97% of holders, making it the least profitable collection to date.

Oligopoly in 2024

From a period when OpenSea had a monopoly during the NFT bull run, the market evolved into a duopoly between it and Blur, and by 2024, an oligopoly with greater competition and diversity between markets.

According to a recent report by CoinGecko, the number of NFT markets with an annual market share of more than 10% has grown from just 2 in previous years to 4 this year. Blur consolidated its leadership as the leader in 2023, capturing 62.4% of the market share in February and surpassing OpenSea as the dominant player for most of the year.

OKX briefly overtook Blur in late 2023, fueled by Ordinls hype, which boosted OKX’s NFT trading volume from $8.35M in October to $311.36M in November and then to $684.65 million in December.

Tensor also saw significant growth, with its market share increasing from 0.1% to 12.1%, as monthly NFT trading volume increased from $1.36 million to $215.57 million of dollars, allowing Tensor to surpass its nearest competitor Magic Eden for the first time in December 2023.

In contrast, OpenSea, which started the year as the largest platform with a monthly NFT trading volume of $438.08 million (41.0% market share), experienced a gradual decline and ended the year in 171.10 million dollars in volume (9.6% share).

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