Whatever Happened to NFTs?

Remember when everyone and their uncle was talking about NFTs? When digital apes were selling for millions and every celebrity seemed to be launching their own collection? Yeah, those days are pretty much over.

The story of NFTs is a wild ride through one of the most spectacular speculative bubbles in recent memory. It's worth revisiting what happened—not to point fingers, but to understand how billions of dollars ended up chasing digital tokens that turned out to be worth, well, not much.

The NFT Moment That Wasn't

Let's rewind to the pandemic era. People were stuck at home, bored, and sitting on cash they couldn't spend on normal things like vacations or concerts. Enter NFTs—non-fungible tokens, which are basically unique digital certificates of ownership built on blockchain infrastructure like Ethereum.

The pitch sounded reasonable enough: own a piece of digital art, join an exclusive club, authenticate ownership of unique items. But things escalated quickly. What started as an interesting use case for digital ownership spiraled into full-blown speculative mania.

The numbers from the peak are staggering. The Merge by Pak sold for $91.8 million in December 2021. Beeple's Everydays collection went for $69.3 million at Christie's. Eight NFT collections each racked up over a billion dollars in sales. The top 100 collections? A combined $39.2 billion in transactions.

Crypto Bros flush with newfound wealth led the charge, but they weren't alone. Main Street investors who had no business wagering five-figure sums jumped in. The classic bubble psychology took over: a new product with questionable fundamental value, rapid price surges, celebrity endorsements, and breathless media coverage all combined to push prices into the stratosphere.

How It All Came Crashing Down

Here's the uncomfortable question nobody wanted to ask at the peak: How did so much capital get deployed into something with arguably zero intrinsic value?

Sure, there's something appealing about joining an exclusive club or proving you own something unique. But the leap from "useful authentication tool" to "speculative frenzy" happened in the blink of an eye. This wasn't rational investing—it was pure FOMO on steroids, more reminiscent of the Dutch Tulip mania than any modern financial trend.

For anyone who got caught up in the NFT craze and needs to sort out the tax implications of their digital art adventure, 👉 tracking your crypto transactions has never been more important. The IRS doesn't care that your Bored Ape lost 95% of its value—they still want to know about every transaction.

The current state of the NFT market tells the brutal truth. Collections that traded for eye-watering sums are now worth pennies on the dollar. The market declined 19% in 2024 as investors shifted back to cryptocurrencies. According to recent data, 98% of NFT drops in 2024 are essentially dead in the water.

What NFTs Teach Us About Speculation

The NFT boom and bust isn't unique—it's just the latest chapter in a long history of speculative manias. But it does offer some valuable lessons.

First, when something is best described using a term with "shit" in its name (looking at you, shitcoins), maybe that's a signal to stay away. Second, exclusivity and hype are terrible substitutes for fundamental value. Third, when everyone from celebrities to your barber is pushing an investment, it's probably time to run the other direction.

The really striking thing about NFTs is how much capital got wasted—roughly $50 billion collectively disappeared into digital tokens that most people now can't give away. Compare that to the AI spending boom, which at least is building infrastructure that could have lasting value. NFTs left behind nothing but expensive lessons and tax headaches.

The Bigger Picture

NFTs are far from the only example of questionable financial products flooding the market. Most SPACs turned out to be garbage. Thousands of ETFs exist that serve no real purpose. The crypto world is dominated by Bitcoin and Ethereum, followed by countless other tokens that are, charitably speaking, not worth your time.

Here's the reality: roughly 90% of tradeable financial instruments are mediocre at best. That applies to hedge funds, equities, and definitely to speculative assets like NFTs. The challenge is figuring out which 10% are worth your attention and capital.

If you're dealing with the aftermath of NFT investments—whether you made money or lost it—proper tax reporting isn't optional. 👉 Getting your crypto taxes sorted out can save you from bigger headaches down the road.

What's Next?

The NFT market isn't completely dead. Some niche use cases still make sense—authenticating luxury goods, managing concert tickets, creating verifiable digital collectibles. But the speculative mania is over, and that's probably for the best.

For those of us watching from the sidelines, NFTs serve as a reminder that not every new technology leads to sustainable investment opportunities. Sometimes a new tool is just that—a tool—and doesn't need to become a speculative vehicle for degenerate gambling.

The inner gambler exists in all of us. The key is keeping that impulse away from your real money and focusing on investments with actual fundamental value. Because when the music stops on the next speculative frenzy—and there will be a next one—you don't want to be left holding a worthless digital token wondering what happened.