Once a hub of million-dollar transactions, the Non-fungible Token (NFT) marketplace now grapples with a grim revelation. A recent study scrutinizing 73,257 NFT collections has unveiled that 95% of them currently hold no value in cryptocurrency, specifically ether. This revelation follows less than two years after a colossal surge in the NFT market.Former SEC official John Reed Stark shed light on this startling revelation. Among the collections scrutinized, a staggering 69,795 of them boast a market capitalization of zero ether, effectively rendering them virtually worthless. Even within the upper echelons of NFT collections, the prevailing price for an NFT has plummeted to a mere $5-$10.Ironically, a select cadre of venture capitalists and Wall Street investors reaped substantial profits by championing NFTs as instruments of decentralization, financial inclusivity, and instantaneous wealth. However, this dream has metamorphosed for most retail investors into a financial nightmare characterized by substantial losses.Stark’s critique extends beyond NFTs; it encompasses the entire cryptocurrency industry. He contends that crypto is not a secure “investment” because it lacks regulations, transparency, and investor safeguards. He further asserts that the industry is marred by deceit and fraud, perpetuating an uneven playing field. While these assertions may appear stringent, they serve as a stark reminder that the crypto sector must address its issues to gain trust among all stakeholders.It’s Official: NFTs Will Go Down in History As Pet Rocks On Steroids (And Crypto Is On The Fast Track To Do The Same)Stick a fork in the NFT marketplace, it’s dead. Remember when NFTs sold for millions of dollars? 95% of the digital collectibles are now probably worthless, less…— John Reed Stark (@JohnReedStark) September 21, 2023 Stark contends that crypto falls short in multiple areas. It doesn’t function as a reliable “investment” due to its dearth of rules, safety mechanisms, and susceptibility to fraudulent activities. Additionally, its volatility, exorbitant fees, and inherent risk undermine its viability as a “currency.”Furthermore, crypto’s inability to maintain stable value prevents it from serving as a “store of value,” questioning its intrinsic worth. Moreover, it poses risks for individuals without access to traditional banking systems, potentially making them susceptible to manipulation. Lastly, the absence of regulations and protective measures casts doubts on its suitability as a “safe haven.” While traditional banks may have their share of issues, crypto doesn’t appear to provide the panacea.
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