NFT sector remains steady despite market death rumors

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The NFT sector is rumored to be flatlining, with blockchain experts dappGambl releasing a study titled “Dead NFTs: The Evolving Landscape of the NFT Market.”

In another development, the latest report from CoinGecko suggests that not much has changed despite the prolonged bear market, suggesting that the rumor may have been exaggerated.

dappGambl’s findings

dappGambl utilized data provided by NFT Scan, the largest NFT data infrastructure provider, to investigate the current situation of the NFT market. From its analysis of 73,257 NFT collections, dappGambl found that 69,795 had a market cap of zero Ether (ETH), meaning that 95 percent of people owning NFT collections were holding onto worthless investments.

The study further estimated that there were around 23 million investors who owned tokens with no practical value.

Several elements contributed to the loss of value in these NFTs. First is the oversupply of NFTs, which was prompted by excessive price speculation and a purchasing frenzy. The NFT market is currently oversaturated with products, resulting in four out of every five collections remaining unsold. Eighteen percent of top NFT collections struggle to find demand, suggesting that buyers are motivated by profits rather than appreciation for the individual tokens.

In addition to market oversaturation and speculative buying, dappGambl’s study emphasizes the NFT market’s environmental ramifications. Since the majority of NFTs are tokenized versions of digital media, many are concerned about the energy-intensive blockchains required to support their existence. Being aware of this, some investors are now reluctant to have any connection with NFTs.

The study investigated that the energy required to mint 195,699 NFT results in an emission of approximately 16,243 metric tons of CO2, which is equivalent to the yearly emissions of 2048 homes.

CoinGecko’s findings

In contrast to dappGambl’s report, CoinGecko’s findings present a rosier outlook for the sector. The data aggregator claims that collectors are still eager to collect NFTs, with each of the top 30 collections on its radar added to the watchlist of more than 400 users.

Nakamigos is the most popular NFT collection on CoinGecko, with 1,234 users adding it to their watchlists. In second place is the Bored Ape Yacht Club (BAYC) from Yuga Labs, with 1,076 users keeping an eye on its price. Next are CyberKongz and Bitmap, with 867 and 851 watchlist entries, respectively.

As of now, NFTs created in 2021 remain the most popular over time, occupying 12 of the top 30 spots in CoinGecko’s popularity rankings. In second place are NFTs launched in 2023, occupying nine positions in the top 30. Although 2022 NFTs are less popular, the Pixelmon collection from 2022 still maintains 786 watchlist entries.

The actual state of the market

Despite a prolonged bear market, CoinGecko’s report suggests that nothing much has changed.

CoinDesk Ben Schiller maintained that NFTs would not be going anywhere soon. While trading volumes are down from $360 million in February to $63 million last week, they are still an attractive asset class. Schiller pointed out that the top five percent of NFTs are still selling at high prices, trading at an average of $42,000.