For every Bored Ape and CryptoPunk there is a Baby Baller, one of the thousands of NFT projects that have faltered not long after celebrated debuts.
On average, one in three NFT collections have essentially expired, with little or no trading activity, blockchain analytics firm Nansen found. Another third are trading below the amount it cost issuers to mint the tokens. Nansen analyzed about 8,400 collections comprised of 19.3 million individual NFTs on the Ethereum blockchain.
As failed projects pile up, long-time crypto observers are having flashbacks to the Initial Coin Offering bust of 2018, when thousands of digital token quickly become worthless after regulators warned they’re probably unregistered securities. Much like ICOs in their heyday, NFTs have become one of the hottest corners of the cryptocurrency world as speculators seek to take advantage of the surging interest and prices for the digital certificates of authenticity most commonly representing art or collectibles.
“The semblance is uncanny,” said the anonymous collector known as WhaleShark who is thought to be one of the largest NFT holders in the world. “Money is flowing too fast and too ignorant into the space.”