One third of NFTs are “dead” and one third have caused losses to their original purchasers

The NFT boom is deflating. Or, rather, the bubble that has been created around them. The analysis firm Nansen claims that one third of the NFTs analyzed have no or very little trading volume. In other words: one third of the NFTs, barring a sudden boom in popularity, are dead, as no one – or very few people – are trading them.

This does not necessarily imply that such NFTs are worthless. A painting, even if it is not frequently traded and remains in the hands of the same person for years, retains its value. That same logic could be applicable to many NFTs.

Nansen’s data also reveal another curious reality. Another third of the NFTs analyzed are trading below the value at which they were sold. In other words: those who bought it at the time of its launch would lose money if they decided to sell it today.

The dataset analyzed by Nansen is composed of 8,400 collections with a total of 19.3 million NFTs on the Ethereum blockchain. A large enough sample to draw general conclusions about the current market dynamics.

This reality does not mean that all NFTs are worthless or that the technology behind them has no potential both now and in the future. But it does seem to reflect something that many experts had been pointing out for months: a considerable percentage of the market is made up of meaningless projects, a feeling reminiscent of that experienced in 2018 with ICOs, when thousands of projects raised notable amounts of money but, soon after, ended up being a failure.

In the last 30 days, moreover, the volume of transactions with NFTs has fallen significantly. Specifically, by 40% compared to the previous month, according to Nansen. On OpenSea, the largest platform for buying and selling NFTs, volume has fallen even more: 67%, according to DappRadar data.

Many are calling this dynamic a cooling or corrective move after several months in which the NFT market has become absolutely crazy both in terms of news relevance and money volume. Be that as it may, what does seem to be a fact is that this sector is going through an inflection point.

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