The Digital Con
Updated: Jun 20
The NFT boom promised a new frontier for artists and a once-in-a-generation investment opportunity. It delivered wash trading, celebrity pump-and-dumps, and a graveyard of overpriced monkey cartoons. A requiem for the greatest speculative mania of the internet age.
Once upon a time, Paris Hilton and Jimmy Fallon sat on The Tonight Show and compared their Bored Ape NFTs like two children trading Pokémon cards. Fallon grinned. Hilton cooed. The cameras zoomed in on framed printouts of cartoon monkeys. The studio audience laughed. Millions of viewers had no idea what they were watching, but many went online that night and bought one anyway.
The Non-Fungible Token craze was not a financial revolution, not a new art movement, and not about digital ownership, but an elaborate worldwide grift dressed up as innovation, driven by celebrity endorsement and powered by the fear of missing out.
The NFT market has now collapsed. Trading volumes fell 97% between January and September 2022 alone, plunging from $17 billion to $470 million. By 2024, monthly art NFT sales had dropped 98% from their peak. The top 20 most traded art NFT collections from 2021 had, on average, experienced a 95% decline. The digital gold rush is over, and the landscape it leaves behind looks less like a new frontier than a smouldering crater. (https://tokenterminal.com/explorer/markets/nft)
A Brief History of Irrational Exuberance
To understand the con, you must first understand the pitch. An NFT is a cryptographic certificate of ownership recorded on a blockchain. The underlying technology is not fraudulent in itself. What became fraudulent was the mythology of digital ownership built around it.
The mania truly erupted in March 2021 when Christie's auction house sold a digital artwork by an artist known as Beeple for $69 million. Overnight, the art establishment had apparently blessed the technology. Suddenly everyone from multinational corporations to teenagers with laptops is making JPEGs and selling them for extraordinary sums. By the end of 2021, brands like Gucci, Dolce & Gabbana, and every celebrity with a publicist had launched their own collections.
"I still hold the vast majority of my NFTs – I couldn't sell most even if I wanted to. From the peak, the loss is upwards of $50,000."
— Collector Joseph Skewes, speaking to Vice News, 2023
The Bored Ape Yacht Club became the most notorious symbol of the era. A collection of 10,000 algorithmically generated cartoon apes, whose peak pricing exceeded $150,000 per image. It attracted Justin Bieber, Madonna, Snoop Dogg, Eminem, Steph Curry, Gwyneth Paltrow, and Jimmy Fallon. A class-action lawsuit would later allege that this celebrity interest was not organic, that stars were paid undisclosed fees through a cryptocurrency platform called MoonPay to post about their apes and create the illusion of grassroots enthusiasm. Yuga Labs, the company behind Bored Ape, called the claims "opportunistic and parasitic".
The Celebrity Pump-and-Dump
The role of celebrity in the NFT catastrophe deserves its own reckoning. A generation of influencers, musicians, athletes, and television personalities used their platforms to shepherd ordinary people toward extraordinarily bad investments, often without disclosing that they were being paid to do so, without understanding what they were promoting, and sometimes as part of arrangements that amounted, legally speaking, to fraud.
The US Securities and Exchange Commission noticed. In 2023, the SEC charged eight celebrities, rapper Soulja Boy and actress Lindsay Lohan among them, for undisclosed crypto and NFT promotions and wash trading schemes. Logan Paul faced lawsuits over his CryptoZoo NFT project, which raised over $6.5 million and collapsed without delivering its promised game. Floyd Mayweather Jr and Paul Pierce were sued over their promotion of EthereumMax. The SEC's chair described the crypto and NFT landscape plainly as "rife with fraud, scams and abuse". An understatement, as it turned out. (https://www.theguardian.com/technology/2023/mar/22/sec-sues-celebrities-cryptocurrencies-lindsay-lohan-tron)
Of 7 million tokens deployed between January 2024 and March 2025, only 97,000 maintained liquidity above $1,000. While an overwhelming majority were effectively worthless from the moment they left the mint. The ecosystem's dirty secret was always that the market's apparent depth and activity was a mirage created through wash trading: the practice of buying and selling to yourself to simulate demand that does not exist.
Buyer's Remorse
The wealthy absorbed real losses, though few with consequences as severe as ordinary investors who couldn't afford them. The following figures offer a sense of the scale of destruction across even the most high-profile holdings.
Buyer NFT Purchase price Later value Loss
Justin Bieber Bored Ape #3001: $1.3M, ~$2,800, −99%
Logan Paul Azuki NFT: $623,000 (~10 − 99.99%)
Steve Aoki Doodles NFT: $346,000 (~$42,000) −88%
Snoop Dogg CryptoPunk: $1.1M (~$688,000) −37%
Eminem Bored Ape: ~$460,000. Near zero: −99%+
These are the losses sustained by people who could absorb them. For every Justin Bieber who wrote off a million-dollar Bored Ape, there were thousands of retail investors who put in savings they could not recover.
The Art World Betrayal
The most corrosive damage was done to the people NFTs were supposedly designed to help: artists. The promise that digital creators could sell work with verifiable scarcity and receive royalties on every secondary sale. A new model for the creative economy. Liberation from gatekeepers.
In practice, the royalty mechanisms were eroded almost immediately by competing marketplaces racing to the bottom to attract traders. The market was overwhelmed by speculators who had no interest in art whatsoever, only in flipping tokens for profit. The artists who genuinely believed in the technology found themselves swept up in a casino where the house always won and the exit doors were narrow. When the crash came, the galleries full of digital art lost their visitors overnight. Most of the "worlds" and collections built during the boom were simply abandoned, ghost towns in a digital landscape that had promised to be the future.
Industry post-mortem report
There is something particularly grim about the failure of the NFT art promise. The technology, in theory, could have done something genuinely useful for digital creators. Instead, it was seized by speculators, inflated by celebrities, gamed by wash traders, and ultimately left as a cautionary tale about what happens when financial mania and legitimate innovation collide.
What We Should Have Known
The red flags were present from the beginning, visible to anyone willing to look past the noise. Most NFTs had no intrinsic value beyond the belief of the next buyer. The "scarcity" they offered was entirely artificial; nothing prevented someone from right-clicking and saving the same image. The blockchain record proved ownership; it did not prove worth. And the markets that priced them were opaque, unregulated, and trivially gameable.
We were told that NFTs would democratise art. Instead, they enriched early insiders, project founders, and people with enough capital to exit before the crash. We were told they would create new income streams for creators. Instead, royalty protections were quietly stripped away by competing marketplaces. We were told they represented the future of digital ownership. Instead, active art NFT traders had dwindled to fewer than 76,000 globally.
The NFT era leaves behind a simple and expensive lesson: that novelty is not the same as value, that blockchain verification is not the same as meaning, and that when Paris Hilton and Jimmy Fallon are comparing cartoon apes on late-night television, it is already far too late to get in.
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