The non-fungible token (nft) market has seen explosive growth followed by significant declines in recent years. Despite the initial hype and huge investment, it is now facing serious instability.
According to a report by nftevening.com, a staggering 96% of nfts are considered “dead” based on three factors: zero trading volume, minimum 7-day sales, and inactivity on twitter.
nft market decline
After examining over 5,000 nft collections and collecting 5 million NFTScan transactions, nftevening nfts-dead-2024/” target=”_blank” rel=”noopener” data-wpel-link=”external”>found that more than 4 in 10 or 43% of nft owners are currently unprofitable. Furthermore, the average lifespan of an nft is only 1.14 years, 2.5 times shorter than traditional crypto projects.
This short lifespan highlights the highly speculative environment of nfts, where rapid price swings and the lure of digital assets often fail to sustain their value over the long term.
nftevening stated,
“The data paints a clear picture: the nft market, once considered the future of digital ownership and investment, is experiencing significant difficulties. The high rate of unprofitability among holders, the stark contrast between successful and failed collections, and the short lifespan of nfts suggest that the market may not be the cash cow many had hoped for.”
A closer look at individual nft collections revealed a significant disparity in profitability. According to the platform’s findings, the Azuki collection is the most profitable, with holders earning more than 2.3 times their initial investment. This success is largely due to the collection’s strong community support, distinctive art style, and strategic marketing efforts.
On the other hand, the Pudgy Penguins collection highlights the risks of the market, with holders experiencing a drastic 97% loss, making it the least profitable collection so far.
Oligopoly in 2024
From a period where OpenSea held a monopoly during the nft boom, the market evolved into a duopoly between it and Blur, and by 2024 became more of an oligopoly with increased competition and diversity between markets.
According to a recent report from CoinGecko nft-marketplaces” target=”_blank” rel=”noopener” data-wpel-link=”external”>reportThe number of nft marketplaces with an annual market share above 10% has grown from just 2 in previous years to 4 this year. Blur cemented its lead as the frontrunner in 2023, capturing 62.4% of the market share in February and overtaking OpenSea as the dominant player for most of the year.
OKX briefly surpassed Blur in late 2023, fueled by enthusiasm for Ordinals, which drove OKX’s nft trading volume from $8.35 million in October to $311.36 million in November and then to $684.65 million in December.
Tensor also saw significant growth, with its market share increasing from 0.1% to 12.1% while monthly nft trading volume increased from $1.36 million to $215.57 million, allowing Tensor to overtake close competitor Magic Eden for the first time in December 2023.
In contrast, OpenSea, which started the year as the largest platform with a monthly nft trading volume of $438.08 million (41.0% market share), saw a gradual decline and ended the year with a volume of $171.10 million (9.6% share).
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