Are NFTs really dead and buried? All signs point to ‘yes’
Non-fungible tokens (NFTs) are in dire straits. With the market in a severe downturn, it’s safe to assume the NFT bubble has well and truly burst.
It was never clear why these digital collectables traded for such large amounts of money. Now they mostly do not. What’s behind their turn of fate? And is there any hope for their future?
What are NFTs?
Non-fungible tokens are a blockchain-based means to claim unique “ownership” of digital assets. “Non-fungible” means unique, as opposed to a “fungible” item such as a five-dollar bill, which is the same as every other five-dollar bill.
But just because an item is unique that doesn’t make it valuable. Digital assets are easily copied, so an NFT is essentially a receipt showing you have paid for something that other people can get for free. This is a pretty dubious basis for value.
The two most traded sets of NFTs are the Bored Apes collection created in April 2021 and the CryptoPunks collection launched in June 2017.
Both sets consist of 10,000 similar-looking but unique figures, distinguished by differing hairstyles, hats, skin colours and so forth. The Bored Ape character seems derivative of the drawings of Jamie Hewlett, the artist who drew Tank Girl and Damon Albarn’s virtual band Gorillaz. The CryptoPunks are even less interesting.
The CryptoPunk NFTs are basic computer-drawn faces. Wikimedia
Why did people buy NFTs?
Although the first NFTs emerged around a decade ago, the trend really started to take off in 2021. And for a time NFTs were very fashionable.
Even the venerable auction house Sotheby’s, founded in 1744, jumped on the NFT bandwagon. Sotheby’s sold 101 Bored Ape NFTs for more than US$20 million in September 2021. They’re now facing a lawsuit from a disgruntled buyer.
As with Bitcoin and similar speculative tokens, the primary driver for buying NFTs was greed. Seeing the initial price rises, people hoped they too could make huge profits. NFTs are essentially a superficially sophisticated form of gambling. Like Bitcoin, they have no fundamental value.
Read more: NFTs, an overblown speculative bubble inflated by pop culture and crypto mania
Generally, one would only profit from buying an NFT by finding a “greater fool” willing to pay even more for it. So there was never a shortage of people – including some quite famous ones – talking them up and hoping to instil a fear of missing out.
Eminem bought a Bored Ape that looked a bit like him. Rapper KSI boasted on Twitter about his Bored Ape rising in price.
For a while there were large increases in the prices of many NFTs. But like all speculative bubbles, it was likely to end in tears. Although it’s almost impossible to predict when a bubble for a speculative asset will burst, we have seen this process play out before.
Centuries ago there were the Dutch tulip, South Sea and Mississippi bubbles. Around 1970, there was a speculative bubble in the shares of nickel miner Poseidon. Then came the Beanie Baby and dotcom booms of the late 1990s – and more recently, meme stocks and Terra-Luna cryptocurrency.
The NFT crash
Punters now seem to be as bored with NFTs as the apes. Google searches for “NFT” – which grew rapidly through 2021 – have fallen away dramatically. Trading volumes have collapsed.
Google searches for ‘NFT’ reached an all-time high around early 2022. Author provided/Data from Google Trends
Prices in the NFT market have also seen huge falls. The prices of Bored Ape NFTs are down about 90% from their peak. The CryptoPunks have done slightly better by losing only 80%.
The value of Bored Ape NFTs has fallen dramatically since March of last year. Author provided/Data from Coingecko.com
A recent report covering about 73,000 NFTs estimated 70,000 are now valued at zero. This leaves 23 million people holding a worthless “asset”.
One high-profile example is an NFT of the first tweet by then-Twitter CEO Jack Dorsey. Crypto entrepreneur Sina Estavi bought this NFT for US$2.9 million in March 2021. When he tried to sell it a year later the Non-fungible tokens (NFTs) are in dire straits. With the market in a severe downturn, it’s safe to assume the NFT bubble has well and truly burst.
It was never clear why these digital collectables traded for such large amounts of money. Now they mostly do not. What’s behind their turn of fate? And is there any hope for their futur
What are NFT
Non-fungible tokens are a blockchain-based means to claim unique “ownership” of digital assets. “Non-fungible” means unique, as opposed to a “fungible” item such as a five-dollar bill, which is the same as every other five-dollar bill
But just because an item is unique that doesn’t make it valuable. Digital assets are easily copied, so an NFT is essentially a receipt showing you have paid for something that other people can get for free. This is a pretty dubious basis for valu
The two most traded sets of NFTs are the Bored Apes collection created in April 2021 and the CryptoPunks collection launched in June 201
Both sets consist of 10,000 similar-looking but unique figures, distinguished by differing hairstyles, hats, skin colours and so forth. The Bored Ape character seems derivative of the drawings of Jamie Hewlett, the artist who drew Tank Girl and Damon Albarn’s virtual band Gorillaz. The CryptoPunks are even less interestin
The CryptoPunk NFTs are basic computer-drawn faces. Wikime
Why did people buy NFTs
Although the first NFTs emerged around a decade ago, the trend really started to take off in 2021. And for a time NFTs were very fashionable
Even the venerable auction house Sotheby’s, founded in 1744, jumped on the NFT bandwagon. Sotheby’s sold 101 Bored Ape NFTs for more than US$20 million in September 2021. They’re now facing a lawsuit from a disgruntled buye
As with Bitcoin and similar speculative tokens, the primary driver for buying NFTs was greed. Seeing the initial price rises, people hoped they too could make huge profits. NFTs are essentially a superficially sophisticated form of gambling. Like Bitcoin, they have no fundamental valu
Read more: NFTs, an overblown speculative bubble inflated by pop culture and crypto man
Generally, one would only profit from buying an NFT by finding a “greater fool” willing to pay even more for it. So there was never a shortage of people – including some quite famous ones – talking them up and hoping to instil a fear of missing ou
Eminem bought a Bored Ape that looked a bit like him. Rapper KSI boasted on Twitter about his Bored Ape rising in pric
For a while there were large increases in the prices of many NFTs. But like all speculative bubbles, it was likely to end in tears. Although it’s almost impossible to predict when a bubble for a speculative asset will burst, we have seen this process play out befor
Centuries ago there were the Dutch tulip, South Sea and Mississippi bubbles. Around 1970, there was a speculative bubble in the shares of nickel miner Poseidon. Then came the Beanie Baby and dotcom booms of the late 1990s – and more recently, meme stocks and Terra-Luna cryptocurrenc
The NFT cra
Punters now seem to be as bored with NFTs as the apes. Google searches for “NFT” – which grew rapidly through 2021 – have fallen away dramatically. Trading volumes have collapsed
Google searches for ‘NFT’ reached an all-time high around early 2022. Author provided/Data from Google Tre
Prices in the NFT market have also seen huge falls. The prices of Bored Ape NFTs are down about 90% from their peak. The CryptoPunks have done slightly better by losing only 80%
The value of Bored Ape NFTs has fallen dramatically since March of last year. Author provided/Data from Coingecko.
A recent report covering about 73,000 NFTs estimated 70,000 are now valued at zero. This leaves 23 million people holding a worthless “asset”
One high-profile example is an NFT of the first tweet by then-Twitter CEO Jack Dorsey. Crypto entrepreneur Sina Estavi bought this NFT for US$2.9 million in March 2021. When he tried to sell it a year later the tNon-fungible tokens (NFTs) are in dire straits. With the market in a severe downturn, it’s safe to assume the NFT bubble has well and truly burst.
It was never clear why these digital collectables traded for such large amounts of money. Now they mostly do not. What’s behind their turn of fate? And is there any hope for their future?
What are NFTs?
Non-fungible tokens are a blockchain-based means to claim unique “ownership” of digital assets. “Non-fungible” means unique, as opposed to a “fungible” item such as a five-dollar bill, which is the same as every other five-dollar bill.
But just because an item is unique that doesn’t make it valuable. Digital assets are easily copied, so an NFT is essentially a receipt showing you have paid for something that other people can get for free. This is a pretty dubious basis for value.
The two most traded sets of NFTs are the Bored Apes collection created in April 2021 and the CryptoPunks collection launched in June 2017.
Both sets consist of 10,000 similar-looking but unique figures, distinguished by differing hairstyles, hats, skin colours and so forth. The Bored Ape character seems derivative of the drawings of Jamie Hewlett, the artist who drew Tank Girl and Damon Albarn’s virtual band Gorillaz. The CryptoPunks are even less interesting.
The CryptoPunk NFTs are basic computer-drawn faces. Wikimedia
Why did people buy NFTs?
Although the first NFTs emerged around a decade ago, the trend really started to take off in 2021. And for a time NFTs were very fashionable.
Even the venerable auction house Sotheby’s, founded in 1744, jumped on the NFT bandwagon. Sotheby’s sold 101 Bored Ape NFTs for more than US$20 million in September 2021. They’re now facing a lawsuit from a disgruntled buyer.
As with Bitcoin and similar speculative tokens, the primary driver for buying NFTs was greed. Seeing the initial price rises, people hoped they too could make huge profits. NFTs are essentially a superficially sophisticated form of gambling. Like Bitcoin, they have no fundamental value.
Read more: NFTs, an overblown speculative bubble inflated by pop culture and crypto mania
Generally, one would only profit from buying an NFT by finding a “greater fool” willing to pay even more for it. So there was never a shortage of people – including some quite famous ones – talking them up and hoping to instil a fear of missing out.
Eminem bought a Bored Ape that looked a bit like him. Rapper KSI boasted on Twitter about his Bored Ape rising in price.
For a while there were large increases in the prices of many NFTs. But like all speculative bubbles, it was likely to end in tears. Although it’s almost impossible to predict when a bubble for a speculative asset will burst, we have seen this process play out before.
Centuries ago there were the Dutch tulip, South Sea and Mississippi bubbles. Around 1970, there was a speculative bubble in the shares of nickel miner Poseidon. Then came the Beanie Baby and dotcom booms of the late 1990s – and more recently, meme stocks and Terra-Luna cryptocurrency.
The NFT crash
Punters now seem to be as bored with NFTs as the apes. Google searches for “NFT” – which grew rapidly through 2021 – have fallen away dramatically. Trading volumes have collapsed.
Google searches for ‘NFT’ reached an all-time high around early 2022. Author provided/Data from Google Trends
Prices in the NFT market have also seen huge falls. The prices of Bored Ape NFTs are down about 90% from their peak. The CryptoPunks have done slightly better by losing only 80%.
The value of Bored Ape NFTs has fallen dramatically since March of last year. Author provided/Data from Coingecko.com
A recent report covering about 73,000 NFTs estimated 70,000 are now valued at zero. This leaves 23 million people holding a worthless “asset”.
One high-profile example is an NFT of the first tweet by then-Twitter CEO Jack Dorsey. Crypto entrepreneur Sina Estavi bought this NFT for US$2.9 million in March 2021. WhNon-fungible tokens (NFTs) are in dire straits. With the market in a severe downturn, it’s safe to assume the NFT bubble has well and truly burst.
It was never clear why these digital collectables traded for such large amounts of money. Now they mostly do not. What’s behind their turn of fate? And is there any hope for their future?
What are NFTs?
Non-fungible tokens are a blockchain-based means to claim unique “ownership” of digital assets. “Non-fungible” means unique, as opposed to a “fungible” item such as a five-dollar bill, which is the same as every other five-dollar bill.
But just because an item is unique that doesn’t make it valuable. Digital assets are easily copied, so an NFT is essentially a receipt showing you have paid for something that other people can get for free. This is a pretty dubious basis for value.
The two most traded sets of NFTs are the Bored Apes collection created in April 2021 and the CryptoPunks collection launched in June 2017.
Both sets consist of 10,000 similar-looking but unique figures, distinguished by differing hairstyles, hats, skin colours and so forth. The Bored Ape character seems derivative of the drawings of Jamie Hewlett, the artist who drew Tank Girl and Damon Albarn’s virtual band Gorillaz. The CryptoPunks are even less interesting.
The CryptoPunk NFTs are basic computer-drawn faces. Wikimedia
Why did people buy NFTs?
Although the first NFTs emerged around a decade ago, the trend really started to take off in 2021. And for a time NFTs were very fashionable.
Even the venerable auction house Sotheby’s, founded in 1744, jumped on the NFT bandwagon. Sotheby’s sold 101 Bored Ape NFTs for more than US$20 million in September 2021. They’re now facing a lawsuit from a disgruntled buyer.
As with Bitcoin and similar speculative tokens, the primary driver for buying NFTs was greed. Seeing the initial price rises, people hoped they too could make huge profits. NFTs are essentially a superficially sophisticated form of gambling. Like Bitcoin, they have no fundamental value.
Read more: NFTs, an overblown speculative bubble inflated by pop culture and crypto mania
Generally, one would only profit from buying an NFT by finding a “greater fool” willing to pay even more for it. So there was never a shortage of people – including some quite famous ones – talking them up and hoping to instil a fear of missing out.
Eminem bought a Bored Ape that looked a bit like him. Rapper KSI boasted on Twitter about his Bored Ape rising in price.
For a while there were large increases in the prices of many NFTs. But like all speculative bubbles, it was likely to end in tears. Although it’s almost impossible to predict when a bubble for a speculative asset will burst, we have seen this process play out before.
Centuries ago there were the Dutch tulip, South Sea and Mississippi bubbles. Around 1970, there was a speculative bubble in the shares of nickel miner Poseidon. Then came the Beanie Baby and dotcom booms of the late 1990s – and more recently, meme stocks and Terra-Luna cryptocurrency.
The NFT crash
Punters now seem to be as bored with NFTs as the apes. Google searches for “NFT” – which grew rapidly through 2021 – have fallen away dramatically. Trading volumes have collapsed.
Google searches for ‘NFT’ reached an all-time high around early 2022. Author provided/Data from Google Trends
Prices in the NFT market have also seen huge falls. The prices of Bored Ape NFTs are down about 90% from their peak. The CryptoPunks have done slightly better by losing only 80%.
The value of Bored Ape NFTs has fallen dramatically since March of last year. Author provided/Data from Coingecko.com
A recent report covering about 73,000 NFTs estimated 70,000 are now valued at zero. This leaves 23 million people holding a worthless “asset”.
One high-profile example is an NFT of the first tweet by then-Twitter CEO Jack Dorsey. Crypto entrepreneur Sina Estavi bought this NFT for US$2.9 million in March 2021. WhNon-fungible tokens (NFTs) are in dire straits. With the market in a severe downturn, it’s safe to assume the NFT bubble has well and truly burst.
It was never clear why these digital collectables traded for such large amounts of money. Now they mostly do not. What’s behind their turn of fate? And is there any hope for their future?
What are NFTs?
Non-fungible tokens are a blockchain-based means to claim unique “ownership” of digital assets. “Non-fungible” means unique, as opposed to a “fungible” item such as a five-dollar bill, which is the same as every other five-dollar bill.
But just because an item is unique that doesn’t make it valuable. Digital assets are easily copied, so an NFT is essentially a receipt showing you have paid for something that other people can get for free. This is a pretty dubious basis for value.
The two most traded sets of NFTs are the Bored Apes collection created in April 2021 and the CryptoPunks collection launched in June 2017.
Both sets consist of 10,000 similar-looking but unique figures, distinguished by differing hairstyles, hats, skin colours and so forth. The Bored Ape character seems derivative of the drawings of Jamie Hewlett, the artist who drew Tank Girl and Damon Albarn’s virtual band Gorillaz. The CryptoPunks are even less interesting.
The CryptoPunk NFTs are basic computer-drawn faces. Wikimedia
Why did people buy NFTs?
Although the first NFTs emerged around a decade ago, the trend really started to take off in 2021. And for a time NFTs were very fashionable.
Even the venerable auction house Sotheby’s, founded in 1744, jumped on the NFT bandwagon. Sotheby’s sold 101 Bored Ape NFTs for more than US$20 million in September 2021. They’re now facing a lawsuit from a disgruntled buyer.
As with Bitcoin and similar speculative tokens, the primary driver for buying NFTs was greed. Seeing the initial price rises, people hoped they too could make huge profits. NFTs are essentially a superficially sophisticated form of gambling. Like Bitcoin, they have no fundamental value.
Read more: NFTs, an overblown speculative bubble inflated by pop culture and crypto mania
Generally, one would only profit from buying an NFT by finding a “greater fool” willing to pay even more for it. So there was never a shortage of people – including some quite famous ones – talking them up and hoping to instil a fear of missing out.
Eminem bought a Bored Ape that looked a bit like him. Rapper KSI boasted on Twitter about his Bored Ape rising in price.
For a while there were large increases in the prices of many NFTs. But like all speculative bubbles, it was likely to end in tears. Although it’s almost impossible to predict when a bubble for a speculative asset will burst, we have seen this process play out before.
Centuries ago there were the Dutch tulip, South Sea and Mississippi bubbles. Around 1970, there was a speculative bubble in the shares of nickel miner Poseidon. Then came the Beanie Baby and dotcom booms of the late 1990s – and more recently, meme stocks and Terra-Luna cryptocurrency.
The NFT crash
Punters now seem to be as bored with NFTs as the apes. Google searches for “NFT” – which grew rapidly through 2021 – have fallen away dramatically. Trading volumes have collapsed.
Google searches for ‘NFT’ reached an all-time high around early 2022. Author provided/Data from Google Trends
Prices in the NFT market have also seen huge falls. The prices of Bored Ape NFTs are down about 90% from their peak. The CryptoPunks have done slightly better by losing only 80%.
The value of Bored Ape NFTs has fallen dramatically since March of last year. Author provided/Data from Coingecko.com
A recent report covering about 73,000 NFTs estimated 70,000 are now valued at zero. This leaves 23 million people holding a worthless “asset”.
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