Rollingstone.com hit the traffic motherlode today with an eye-catching post calling the end of non-fungible tokens (NFTs). The piece, “Your NFTs Are Actually – Finally – Totally Worthless,” picks up a new study by dappGambl, a community of finance experts, and runs with it hard. And it hit a nerve. As of writing (lunchtime Thursday), the post is top-trending on their website and on Google itself. Type the term “NFTs” into your browser, and it appears at the apex of the search results.
To be sure, there is plenty of meat here and the headline isn’t completely wrong, at least judged by the loose standards of headline writers. It’s sort of true that most NFTs are, indeed, worthless. The study found that, out of a sample of 73,257 NFT collections, 69,795 have a market cap of zero ETH. That’s 95% of the total, which is almost “all” of them. The study says that 23 million people now hold NFTs with no value, which is certainly tough for those investors.
“Just 21 percent of the collections included in the study can claim full ownership, meaning around four out of every five collections remains unsold,” the writer, Miles Klee, notes. “With buyers becoming more discerning, ‘projects that lack clear use cases, compelling narratives, or genuine artistic value are finding it increasingly difficult to attract attention and sales.’”
But are NFTs really dead, as the post suggests? Not exactly.
While trading volumes are certainly down, they are not non-existent. Data collected by The Block shows that trading reached about $63 million last week. That’s a far cry from the $360 million-plus weekly volume we saw in February. But it’s also not nothing.
Plus, there’s the 5% of collections that are actually worth something. The post says the study explains why “you don’t see people hawking ugly cartoon apes on the internet as much anymore.” But Bored Ape NFTs are actually trading respectably. The average price of a Bored Ape Yacht Club NFT is about $42,000.
More important than precise trading dynamics is what the post shows about how the mainstream media tends to work. Publications search for extremes, absolute highs and lows that make for arresting headlines. Just last November, Rolling Stone put out a headline saying “The NFT Bubble Has Burst, but the Value For Creators Is Just Heating Up.” Last summer, it loudly touted its own tie-up with … one of the most famous NFT collections around, the Bored Ape Yacht Club. “This is a rare chance for the public to take home a piece of art from BAYC with Rolling Stone’s stamp of approval,” the promo piece said. Now Rolling Stone has an opposite sort of message similarly filled with hyperbole.
Anyone who has covered crypto for a while has seen this movie many times before. Bitcoin has been written off countless times, yet it’s still trundling out blocks. It has millions of followers and the price is now $26,000-plus, which, again, isn’t nothing.
Of course, there have been highs and lows, but the idea that a technology as useful as NFTs is going away entirely is silly. NFTs are a digital wrapper for non-physical and physical items allowing them to be tracked and traded. That is an idea with wide applicability, whether it’s reflected in art markets or not.
The bigger story here is that media publications are losing credibility because they disingenuously look for extremes when the real world is full of nuance. Many in crypto, as a result, “have already started tuning out the newscycle,” as my colleague Dan Kuhn wrote recently of this phenomenon. People are building and developing and ignoring whether the media says the world is up or down. Their reality isn’t framed by what a journalist somewhere says it is; they look at tech and make something useful out of it. And thank god they do.