NFTs Are Crashing and Who Could Have Seen This Coming Other Than Basically Anyone?

Home Technology NFTs Are Crashing and Who Could Have Seen This Coming Other Than Basically Anyone?
NFTs Are Crashing and Who Could Have Seen This Coming Other Than Basically Anyone?
A truck parked outside of Christie’s in New York on May 11 displaying a CryptoPunk NFT.
A truck parked outside of Christie’s in New York on May 11 displaying a CryptoPunk NFT.
Photo: Dia Dipasupil (Getty Images)

The crypto world saw a dizzying surge this year of NFTs being used to sell ownership of everything from works of online art to random tweets, though it was never clear just why NFTs were commanding such staggering prices. Bragging rights? Status symbols? Or just pure speculation driven by skyrocketing cryptocurrency prices and its attendant mythos of get-rich-quick fantasies?

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The current answer to the question “What is the value of an NFT” appears to be “not much and dwindling fast.” Crypto news site Protos reported on Wednesday that NFTs tracked in the Nonfungible.com database peaked on May 3, booking $102 million in NFT transactions in a single day. The seven-day period surrounding the peak brought in $170 million in transactions. But in the past week, that number collapsed to $19.4 million in NFT sales, a 90% drop from the peak.

NFTs, or non-fungible tokens, are digital collectibles encoded onto a blockchain, the same technology that powers cryptocurrencies, creating a unique digital watermark signifying ownership of the digital rights to an asset.

While eye-popping NFT art sales drew the lion’s share of media attention, the market was and continues to be dominated by crypto-collectibles—i.e., small pixel art faces called CryptoPunks, portraits called Hashmasks, and Twerky Pepes (based on the popular frog character that has become synonymous with both imageboards like 4chan and the online far right). According to Protos, their data set shows $9.2 million in crypto-collectibles sold in the last week. “Metaverse” NFTs, such as an app that allows people to buy digital real estate, sold $3.3 million in the last week. Sports memorabilia, such as basketball trading card-like NBA Top Shot, have also bypassed art, with $3.16 million in sales over the same time period. Art came in behind them all at $3 million.