96% of NFTs are considered ‘dead’ as the market struggles with speculation and volatility.

The NFT market, once seen as a revolution, is now struggling with a steep decline, leaving many holders in the red.

The non-volatile token (NFT) market has seen explosive growth, followed by a steep decline in the past few years. Despite the initial hype and huge investment, it is now struggling with serious uncertainty.

According to a report from nftevening.com, 96% of NFTs are considered “dead” based on three factors – zero trading volume, minimal 7-day sales and inactivity on Twitter.

NFT market decline

After analyzing over 5,000 NFT collections and collecting 5 million transactions from NFTScan, nftevening found that more than 4 out of 10 or 43% of NFT holders are currently not profitable. Moreover, the average lifetime of NFT is only 1.14 years – 2.5 times less than traditional crypto projects.

This short life span highlights the highly speculative environment of NFTs, with rapid price appreciation and the allure of digital assets often failing to maintain long-term value.

In the evening he said,

“The data paints a clear picture: The NFT market, once hailed as the future of digital ownership and investing, is facing significant problems. The high turnover rate among holders, the wide disparity between successful and unsuccessful collections, and the short lifespan of NFTs all suggest that the market may not be the golden goose many had hoped for.”

A closer look at individual NFT portfolios reveals significant variation in profitability. According to platform findings, the Azuki Collection is highly 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 Penguin collection highlights the risks in the market, with holders facing a whopping 97% loss, making it the least profitable collection yet.

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Oligopoly in 2024

Since OpenSea became a monopoly during the NFT bull run, the market has turned into a duopoly between it and the blur, and by 2024, it has become more of an oligopoly with competition and differentiation between marketplaces.

According to a recent CoinGecko report, the number of NFT marketplaces with an annual market share of over 10% has grown from just 2 in the previous year to 4. Blur cemented its leadership as the leader in 2023, capturing 62.4 percent of the market share in February and making OpenScene the dominant player for most of the year.

OKX briefly passed the blur in late 2023, driven by Ordinals hype, which saw OKX NFT trading volume increase from $8.35 million in October to $311.36 million in November and then $684.65 million in December.

Monthly NFT trading volume increased from $1.36 million to $215.57 million, and its market share increased from 0.1% to 12.1%, allowing Tensor to surpass its closest competitor Magic Eden for the first time in December 2023.

In contrast, Opensea, which started out as the largest platform with monthly NFT trading volume of $438.08 million (41.0% market share), gradually declined to end the year with $171.10 million (9.6% share).