Greg Mason Burns

The NFT Market is a Massive Ponzi Scheme

The NFT Market is a Massive Ponzi Scheme

Manipulation #11 – House on Newcastle Photography on Archival Paper (2021)

Seriously, if you’re considering getting into the NFT market, seller beware. It is not really buyer beware if you can convince people to jump into the game. Simply put, the more people in the game the easier it is to sell and make a profit. I can’t say it as well as Canadian Artist Kimberly Parker puts it, so you should read her article posted below. In short, she did a massive data scrape of those markets that sell NFTs, and the results show that the average artist actually loses money, and that data are skewed by the very few who make millions. Here are the highlights:

  • The data are difficult to find, and what does exist doesn’t paint a good view for the artists. Always ask why there isn’t transparency. It benefits someone and they don’t want you to know why for a reason.
  • The average sale price is significantly higher than the median sale price. That means that data are skewed toward those very few who make a lot of money off NFTs.
  • Just under 70% of all NFTs sold have never had a secondary sale. Furthermore, Only 20% of all NFTs sold have only ever had one secondary sale. This is important because…
  • One third of all sales are $100 or less, and the average fee for those sales have an average fee of $100.50. Yes, you read that right. It does get better for those who make more on sales, but alas, over 80% of all sales are for less than $700.
  • In fact, less than 2% of all sales sell at or above the recommended primary sale price.
  • Someone is making a lot of money off NFT sales. Unless you’re super famous, it’s probably not you.

Seriously, read the article. And if you don’t like the slice of data that she used, just Google some more and you’ll find plenty of other articles stating much the same thing. Here’s the link: Most artists are not making money off NFTs and here are some graphs to prove it