For the Love of the Game

(Market Commentary)

Last week a majority of the world learned that 95% of NFTs are worthless. Know who already knew this? Everyone that is still following NFTs.

Over time you get a feel for the market and develop a sixth sense for how it moves, what moves it, and what has value. Years of experience taught us that the NFT market runs in cycles, with the hot side of the market lasting usually just a few weeks, though the start of the calendar year’s run usually lasts for a few months.

Between these runs most NFTs become completely illiquid and fade into oblivion. When the next cycle comes around they're replaced by an entirely new crop of NFTs. If I were a betting man I'd say that probably 95% of NFTs become worthless between these cycles. That number only grows as more and more supply is created.

There's a much more important story to tell about the NFT ecosystem than the "95% worthless" narrative that has everyone distracted. It's that 94% of the market's value has disappeared. Let me pose a couple of questions to demonstrate why this matters.

Source

Would you measure the stock market by the number of stocks worth one cent or less and would you use bankrupt and failed businesses to represent the overall market value? If I told you that the value of IBM, Microsoft, Apple and NVIDIA were down 95% wouldn't that be more noteworthy?

That is the real story in NFTs and it’s exactly the story that the Forkast 500 NFT Index has been telling us throughout the year. The top 500 NFT collections across blockchains represent a majority of the value of the NFT market so measuring them as a proxy of the market, like the S&P 500 is a proxy of the stock market, is the best way to measure the health of the NFT economy. This index reflects that the NFT market has lost nearly 94% of its value since its peak in 2022.

Most of us do not consider this bad news, especially if you were of the mind that NFTs were already overvalued. But, if we’re measuring the value of NFTs from their peak value, to today, let’s also measure from the beginning when NFTs were also worth almost nothing. When you compare 2020’s data to the still incomplete 2023 we find some pretty enlightening facts.
 

2020 vs 2023

Already in 2023, unique buyers are up 10,100%, sales are up 31,837%, and total transactions are up 52,304%, all while trade profits are down -64,999%. Maybe most important is that for the most part, collectors and traders haven’t left the NFT economy, even with trade profits nowhere to be found. People believe in the tech, and they believe in the future that NFTs will power.

The conversation has now significantly changed, so let’s reset the room.

Is the value of the NFT ecosystem down from its peak? Yes.

Are NFTs still a world changing technology that has grown exponentially and become a multi billion dollar a year economy in just a few years? 100%.

This is the story that needs to be told. Pass on what you have learned, and make sure that if people are sharing the “95% worthless” story, that they’re also sharing the “up 52,000%” one too. 

Peep the charts

Source

Last week was the fifth week in a declining NFT sales but like last week, overall there seems to be some stabilization. The week's numbers still mostly keep us on par with the action we saw in May/June 2021, and the next milestone would be falling to the $30m - $55m range that we saw in early 2021.
 

• DraftKings, DMarket, Gods Unchained, Sorare. “The Four” locked down the top four this week, combining to represent roughly 30% of last week’s total NFT sales volume.

• Reavers' new mint gives Solana its first top ten collection since Tensorians made the elite list exactly 1 month ago.

• Nakamigos delivered their Cloaks mint as a free claim for holders, and the remaining unclaimed NFTs were sold for .05 ETH. The secondary market caught fire, with NFTs selling for an average of $276 on Sept 24.

• BAYC boasts the top collectible NFT sale of the week with BAYC #3149 selling for $221k. 

• Ethereum is the true king of NFTs, (sorry DraftKings), almost outselling the other top ten collections, which combined for just over $38m in sales.

• Polygon's DraftKings has kept the blockchain front and center, with 73% of Polygon’s sales coming from the sports collectibles.

• Solana had a few new collections, Reavers and Clear Collectibles, that brought eyes and trading action last week.

• Mythos' DMarket is still seeing a majority of its volume being driven by gaming skins. Check out S4mmy.eth’s X thread that explains the revolutionary CS:GO NFTs.

• Bitcoin Ordinals creator is proposing a change to the Ordinals numbering system along with a replacement for BRC20s called Runes. This is causing significant debate in the community as the implications can impact the value of the existing collectibles.

Noteworthy Happenings

• Beeple’s Politics are Bullshit NFTs are being scooped up by investors , with one investor buying 333 ETH worth so far.

• Panini packs ripped on the blockchain last week with Best of the NBA NFT Packs trading up a storm.

• Matt Kane sold out his new Anons collection, bringing in over 214 ETH across the small supply NFT collection.

• Pokemon cards are being sold on the blockchain, with individual cards put in a vault, tokenized and then sold in NFT packs. 

NFT Forkast

This week the Forkast 500 NFT Index fell below 2,000 for the first time ever. The value of NFTs continues to decline as traders sell their NFTs for liquidity, and it also reflects declining crypto prices.

You can stay plugged in with a daily Forkast 500 Index and CryptoSlam market update by checking out my daily 5 minute NFT update videos on NFTLDR.

Until the next time, have a MEGA GM!

— Yehudah Petscher

News Headlines

• Mythical Games Blankos Block Party is coming to mobile devices thanks to friendlier NFT policies.

• Proof’s Moonbirds are headed to the moon. Literally.

• Rick and Morty creator launches NFT backed animated series on Fox and Hulu.

• Farmville co-creator raises $33m to build Web3 “forever games”.

• Yuga Labs announcements multiple new technical partners to power their Otherside Metaverse.

• Animoca Brands is launching another new Web3 game called Phantom Galaxies on Steam and Epic Games Store.

Upcoming Drops

WAGMI Games - Founders Pack
Date - Sept 27
Blockchain - Ethereum
Price - .13 ETH

DraftKings - RM Football Rush Primetime W4
Date - Sept 27
Blockchain - Polygon
Price - $19.99 - $579.99 USD

Fewocious - FEWOS
Date - Sept 28
Blockchain - Ethereum
Price .4 ETH

Marvel - Black Panther #18
Date - Sept 28
Blockchain - ImmutableX
Price - $6.99 USD

DC - Batman #423
Date - Sept 28
Blockchain - Palm
Price - TBA