According to recent studies, the majority of the NFT market is now worthless—including Bored Ape, which used to be one of the most expensive NFTs.

In 2022, it was said that around USD 24.7 billion (around PHP 1.4 trillion) was spent on NFTs. What’s more, over 10,000 active wallets engage with those assets daily. The thing is, these NFTs first grew traction in 2017 and then exploded into popularity again around late January 2021. From there, it grew into a new era of digital collectibles that many people—including celebrities–wanted to get their hands on. 

Investopedia defines NFTs or non-fungible tokens as unique cryptographic tokens that exist on a blockchain and cannot be replicated. These assets can be in the form of art, music, in-game items, videos, and more. Among the many characteristics that added to their appeal and popularity was each token’s rarity. This sparked the interest of many investors, thus driving the prices of these digital assets. 

Despite strong predictions about NFT adoption in 2023, the market has seen some significant price crashes this year. More so, celebrities and influencers like Justin Bieber, Logan Paul, Paris Hilton, and Madonna have lost millions by investing in Bored Ape NFTs—which used to be one of the most valuable assets. 

What is the Bored Ape Yacht Club?

The Bored Ape Yacht Club, or BAYC for short, is an extensive collection of 10,000 NFTs made possible by the release of Ethereum‘s ERC-721 standard—focused on NFTs. These NFTs are cartoon-like graphical representations of apes that have distinct characteristics. Additionally, they can be identified by their metadata—which includes their surroundings, jewelry, attire, fur, and eyes. In the collection, no two pieces are the same because each one has a variety of traits and qualities. 

While the 2021-released Bored Ape Yacht Club NFT collection is akin to other physical works of art, these assets stand out because they are digitally created and kept on the blockchain, where users can claim ownership of them. 

Aside from their distinctive characteristics, each NFT also works as a membership to the Yacht Club—a collection of online areas and activities that are only accessible to Bored Ape users. During its peak, some of the most expensive Bored Apes sold for over USD 2,000,000 (around PHP 114 million). This propelled it into becoming a status symbol during NFT’s phenomenal rise. 

What’s Happening in the NFT Market

However, all good things come to an end, and the same goes for NFTs. Just recently, the world saw another ongoing NFT crash that affected even the most expensive assets. Case in point: Madonna’s NFT, which she got at USD 470,000 (around PHP 26.8 million) only received an offer amounting to USD 50,000 (around PHP 2.8 million), signifying an 89% drop.

Around August, reports also showed that Madonna, Paris Hilton, and Justin Bieber sued against auction house Sotheby’s, claiming that the auction house “misleadingly promoted” the NFTs to “manipulate the price”. 

Aside from Bored Ape NFTs, some assets that used to be sold for more than USD 35,000 (around PHP 1.99 million) now sell for about USD 6 (around PHP 341). 

But why is that the case? For one thing, studies have shown that 79% of all NFT collections are now unsold, and the surplus of supply has created a buyer’s market. Moreover, the functionality of an NFT is limited beyond the digital realm, unlike other tangible investments like gold or property.

What This Means for Investors

Some believe that the NFT market can still recover and that it can still have some real-world use in the future across different industries. Given how NFTs are known for volatility just like cryptocurrencies, this phase may be considered one of the asset’s bearish runs.

But while it can be challenging to predict how the prices are going to change in the future, investors have the option to either stick with their assets and wait for them to recover or sell them while they haven’t totally crashed.