96% of NFT collections considered ‘dead’

NFT Evening analysts predict that 96% of the 5,000 NFT collection will be sold out by 2024.

The report reveals the state and problems of the non-fungible token market in 2024. According to experts, 96% of the more than 5,000 existing NFT collections are “dead.” This means that they have zero trading volume, have not made sales for more than seven days, and have no activity on the X social network.

Source: NFT Evening

Analysts note that currently 4 out of 10 NFT owners should make a profit from their tokens. At the same time, the average lifespan of collections is 1.14 years, which is 2.5 times less than the same indicator for classic crypto projects.

Also, 2023 was a record year in terms of the number of NFT crashes. During this period, almost 30% of projects in this segment fell into the “dead” category. According to experts, 44.5% of NFT owners face losses.

Source: NFT Evening

The NFT Evening team also identified the most profitable collection to date. It turned out to be the Azuki project, which on average increased the investments of token holders by 2.3 times.

“This success can be attributed to the collection’s strong community engagement, unique artistic appeal and effective marketing strategies.”

Experts also mentioned the most unprofitable NFT collection – Pudgy Penguins. It suffered a 97% decrease in value, which makes it the record holder for the decrease in owner income.

Experts emphasized that the non-fungible token market is declining and investors in the segment should proceed with caution. They also believe that NFT creators should reconsider their approach to project implementation.

End of an Era

NFTs from popular collectibles that were bought in a wave of excitement in 2022 are selling at huge losses.

For example, Arkham Intelligence calculated that the roughly $2 million worth of NFTs that pop star Justin Bieber purchased in 2022 are now worth just over $100,000. Losses have reached 94.7%.

Justin Bieber NFT Purchases: 94.7% Down

Did you know that Justin Bieber bought over $2 million worth of NFTs in 2022, and their current value is barely over $100,000?

His wallet in Arkham currently has around $500,000 worth of ETH and APE.

Details below: pic.twitter.com/U6qH84C3OO

— Arkham (@ArkhamIntel) April 24, 2024

The singer’s wallet initially held $2.34 million worth of Ethereum (ETH). Most of the amount, $1.86 million, went to purchasing two Bored Ape Yacht Clubs (BAYCs) and a pair of Mutant Ape Yacht Clubs (MAYCs). The portfolio also included tokens from the World of Women, Doodles, Otherdeed, and Metacard collectibles. Since then, the assets have lost between 89.7% and 97.4% of their value.

Additionally, in August, Deepak Thapliyal, the owner of the most expensive CryptoPunk #5822, who purchased the token for 8,000 ETH ($23.7 million at the time of the transaction) in 2022, got rid of the asset without disclosing the sale price. Amid excitement in the industry, the deal became the fourth most expensive among all NFTs in 2022.

The End of an Era.

👋 #5822, Enjoy your new 🏡

— Deepak (@dt_nfts) August 19, 2024

The community suspected that the token was sold at a loss. The buyer is alleged to be user X, known by the nickname VOMBATUS. The token was reportedly purchased for 1,500 ETH (~$3.9 million), 80% cheaper than the previous price.

The Rise and Fall of OpenSea

In January 2022, the total volume of non-fungible tokens exceeded $6 billion. By July 2024, it had fallen below $430 million. NFTs are still alive, but they are in bad shape.

Once the largest NFT marketplace, OpenSea is in even worse shape, The Verge reports, adding that the situation has been exacerbated by claims from the Securities and Exchange Commission, the Federal Trade Commission, U.S. and international tax authorities, increased competition, discrimination allegations, and employee layoffs.

OpenSea’s valuation also 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).

But The Verge notes that the company still has some momentum. An internal document shows that as of November 2023, OpenSea had $438 million in assets and $45 million in crypto reserves. With that capital and a new business model, it hopes it can weather the tough times.

“As of November 2023, it had $438 million in cash and $45 million in crypto reserves. The company is moving forward with this capital, hoping that it will help it navigate the rough seas of its ‘2.0’ transformation.”

What will happen to the NFT market?

The NFT market has long been limited to marketplaces like OpenSea or Rarible, where users can mint new NFTs or trade them with others.

There are lending services or platforms available to trade derivatives on NFTs from large collectibles, allowing users to speculate without owning the NFTs.

However, the bearish dynamics in the non-fungible token market continue, as evidenced by the rapid decline in prices of NFTs from blue chip collectibles.