The NFT market is facing a significant downturn, with a recent report revealing that 98% of NFT projects launched in 2024 are considered "dead." Only a mere 0.2% of these projects have managed to return profits to investors, raising concerns about the sustainability of the market.
Key Takeaways
98% of NFT drops in 2024 are classified as dead.
Only 0.2% of NFT projects have returned profits to investors.
64% of NFT drops have fewer than 10 mints.
98% of NFT drops record less than 10 trades in their first week.
Average price drop of 50% within the first three days for most projects.
The Current State Of The NFT Market
An analysis conducted by NFTEvening in collaboration with Storible examined 29,079 NFT drops from January to August 2024. The findings indicate a troubling trend in the NFT sector, characterized by a surge in new collections but a stark decline in market participation and prices.
Despite the creation of an average of 3,635 NFT collections per month, the market appears oversaturated. This oversupply has led to a high failure rate among projects, with 98% of NFT drops failing to survive beyond their initial launch.
Profitability Concerns
The report highlights that only 0.2% of NFT drops have generated profits for investors. Among the NFTs that are still actively traded, only 11.9% have proven to be profitable. This alarming statistic suggests that investors need to exercise greater caution and selectivity when purchasing NFTs, as the likelihood of success is diminishing.
Market Dynamics
The NFT market is experiencing a paradox: while there is a continuous influx of new collections, the demand is not keeping pace. Key statistics from the report include:
64% of NFT drops have less than 10 mints.
98% of NFT drops record fewer than 10 trades in their first week.
The price of 98% of NFT drops decreases by at least 50% within the first three days.
For 84% of projects, the all-time high price matches the mint price.
These figures paint a picture of a market struggling to maintain momentum, with many projects failing to attract interest or investment.
Notable Sales Amidst Decline
Despite the overall decline, there have been notable sales in the NFT market. For instance, a CryptoPunk, number #1563, was sold for 24,000 ETH, equivalent to approximately $56.3 million. This sale, along with others, contributed to a weekly trading volume nearing $85 million during the first week of October 2024.
Such record sales highlight that while the market is in decline, there are still opportunities for significant profits, albeit for a select few projects.
Conclusion
The NFT market in 2024 is at a crossroads, facing a decline in profitability and sustainability. With 98% of projects failing and only a fraction returning profits, investors must navigate this challenging landscape with caution. The future of NFTs may depend on a shift in market dynamics, focusing on quality over quantity to foster a healthier ecosystem.
Sources
NFT drops 2024: 98% of the projects are dead, The Cryptonomist.