- Worldwide googled queries for the term “NFT” drops from 100 to 95 and 89 for “non-fungible token”
- NFT market sales numbers fall by 80%
- James Surowiecki’s “An Oversupply of NFTs Is Going to Kill the Golden Goose” detects NFT oversupply is the cause of this decline
Non-Fungible Tokens (NFT) seem to have lost the hype it once drove. One can’t have heard about the NFTs. As their name suggests, the tokens demand their non-fungible nature; the uniqueness of assets and collectibles brings in loads of investors aspiring to spend on acquiring the unique product. Yet, interest in NFT is dropping at a sickening rate, and the latest cryptocurrency phenomenon is losing the market.
Excess of NFT is Bad for the Market!
Thanks to the fact that anything digital can be NFT, such as drawings, animated GIFs, songs, or even articles, today the industry is undergoing “over-capitalization.” As James Surowiecki, the author of “The Wisdom of Crowds,” in his work, said, an “oversupply of NFTs” might disrupt the market.
“NFT”: initially the most googled term
At the beginning of 2021, NFTs took over the world like a storm. From March 7th to 13th, “NFT” was the most googled term; an all-time high touched 100 on Google Trends (GT). The following week in the U.S., it was down to 29 and 95 during the last week. The declining rates of worldwide “NFT” queries went from 100 to 95, and in that, the most searches were from China, followed by Uganda, Canada, Singapore, and the U.S., respectively. The entire term “non-fungible token,” the stats slid from 100 to just 89 now.
Stats State the Start of Strain
On Saturday, the evaluation market reported the NFT marketplace NBA Top Shot’s sales dropped to their lowest percentages ever. And based on the data from nonfungible.com, recently, NFT’s active market wallets and sales numbers witnessed a sharp fall; their 30-day stats reveal an NFT sales drop of over 80%.
Surowiecki’s Analysis: “oversupply” of NFT
“The Wisdom of Crowds”’s author James Surowiecki, in his recent article named “An Oversupply of NFTs Is Going to Kill the Golden Goose,” published on March 31st, 2021, explained that even though NFTs and crypto assets represent an “intertwined” unit, since technically, NFTs are based on Ethereum blockchain, both reflect contrasting characteristics “when it comes to supply.”
Bitcoins & NFTs Far Apart in Terms of Supply
Surowiecki’s editorial elaborated that one of the contributing factors behind Bitcoin is its strictly limited supply. On the contrary, NFTs’ supply is endless. Even if they are unique, too many different individual items, that too accounts for an unlimited supply. As Surowiecki pointed, the infinite flow will “certainly” drain demand. He then added it doesn’t necessarily mean every NFT’s price will drop, “truly rare or inherently appealing items may well hold their value.”
And as the finance author so pointed out, with NFTs, there’s no one in charge, “you can create a new NFT in a matter of minutes.” Despite as fun as it sounds, that is a recipe for a collapsing market.