NFT market collapses as 95% of collections hit zero value

Four years ago, non-fungible tokens (NFTs) were a booming market, backed by celebrities and high-profile investors. Now, many of these digital assets have lost over 90% of their value, with experts pointing to a mix of declining interest, regulatory pressures, and high costs as key factors in the downturn.

In 2021, NFT trading hit a peak of over US$2.7 billion, with collections like Bored Ape Yacht Club and CryptoPunks gaining massive attention. Celebrities such as Justin Bieber and rapper Snoop Dogg openly promoted them, while business figures like rich-lister Craig Heatley and former All Black Dan Carter invested in projects like Glorious, a platform for artists to sell digital art as NFTs. Brooke Howard-Smith also co-founded NF Labs, partnering with Snoop Dogg on Fluf World NFTs.

By 2023, the market had collapsed. Data showed that 95% of 73,000 NFT collections were worth zero ether. Bored Ape Yacht Club, once valued at a peak of US$394,764 per token, dropped to a floor price of just US$12,000. CryptoPunks fell by 89%, while Mutant Ape Yacht Club plummeted by 98%. Experts attribute the crash to multiple issues. Speculative hype faded, retail interest waned, and regulators tightened oversight. High transaction fees and the lack of practical use beyond collectibility also contributed to the sharp decline. Olivier Jutel, a senior lecturer at the University of Otago, has stated that a recovery for NFTs is unlikely.

The NFT market has shrunk dramatically since its peak, with most collections now holding little to no value. Once seen as a lucrative investment, these digital assets have struggled to maintain relevance amid shifting market conditions and regulatory challenges. The steep declines leave many questioning the long-term viability of NFTs as a financial asset.