96% of NFTs Are Considered Dead, Report Says

The NFT market, once heralded as a revolutionary digital asset class, is now facing significant challenges, with a recent report indicating that 96% of NFT collections are considered "dead." This stark finding comes after the meteoric rise of NFTs in 2022, which saw unprecedented levels of hype and investment.

Researchers analyzed around 5,000 NFT collections and tracked approximately 5 million transactions, focusing on metrics like holder profitability, collection performance, and project longevity. The study by NFT Evening revealed that nearly half (43%) of current NFT holders are unprofitable, with the average NFT holder facing a loss of 44.5%. The typical lifespan of an NFT project was found to be just 1.14 years, significantly shorter than that of cryptocurrency projects.

2023 was particularly harsh for the NFT market, with nearly one-third of all NFT projects failing, marking a record-high failure rate. This decline highlights the volatility and speculative nature of the NFT space, where success is not guaranteed, and many projects struggle to maintain relevance or value over time.

Despite the overall downturn, certain NFT collections continue to thrive. The Azuki collection stands out as the most profitable, with holders enjoying a return on investment (ROI) of over 2.3 times. Azuki's success is attributed to strong community engagement and effective marketing strategies, which have sustained interest and turnover within the collection. In May, the collection saw record sales of $1.13 million in a single month, with total sales surpassing $1.12 billion.

Other notable NFT collections like CryptoPunks and Bored Ape Yacht Club also remain popular, continuing to attract significant interest from collectors and investors alike. These collections are exceptions in a market where the majority are struggling.

On the other hand, the Pudgy Penguins collection, despite its strong performance in earlier periods, has been classified as "dead," with a staggering 97% decline in value, underscoring the rapid and often unpredictable shifts in the NFT market.

As the NFT market evolves, the disparities between successful and failing projects have become more pronounced. While some high-value collections continue to perform well, the overall market sentiment has shifted, with many projects losing their luster and profitability.

Interestingly, amidst this downturn, certain NFT projects continue to find their footing. The Trump NFT collection, for example, has launched a fourth series titled "America First," and Tron founder Justin Sun has announced plans to launch his own NFT project on the blockchain, signaling that while the NFT market may be cooling, it is far from extinct.

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