On average, one in three NFT collections have essentially expired, with little or no trading activity, blockchain analytics firm Nansen found. Another third are trading below the amount it cost issuers to mint the tokens. Nansen analyzed about 8,400 collections comprised of 19.3 million individual NFTs on the Ethereum blockchain.

As failed projects pile up, long-time crypto observers are having flashbacks to the Initial Coin Offeringbustof 2018, when thousands of digital token quickly become worthless after regulators warned they’re probably unregistered securities. Much like ICOs in their heyday, NFTs have become one of the hottest corners of the cryptocurrency world as speculators seek to take advantage of the surging interest and prices for the digital certificates of authenticity most commonly representing art or collectibles.

“The semblance is uncanny,” said the anonymous collector known asWhaleSharkwho is thought to be one of the largest NFT holders in the world. “Money is flowing too fast and too ignorant into the space.”

While purchases of Bored Apes by celebrities such asMadonnafor more than $500,000 kept the collection in the headlines, overall NFT sales have ebbed recently. The 30-day sales volume is down 40% from the prior month, according to Nansen. Trading volume on OpenSea, the biggest NFT marketplace, is down 67% in the last 30 days, DappRadar data show.

Industry participants say the decline is more a sign of frenzied demand cooling rather than a bubble bursting. NFTs are still being touted for use in everything from video gaming to commerce.

“We are at a stage of stabilization of the NFT market, after the crazy peaks of last year,” saidGauthier Zuppinger,co-founder of the NonFungible markets data platform.

Still, there are examples such as EL byReza Milani,an Iranian visual artist -- a collection of 1,456 cartoonish people standing by their bicycles -- that’s seeing virtually no trading activity on OpenSea. The NFTs have 190 owners. Then there is the Baby Ballers project backed by NBA player John Wall. The all-star guard’s collection of cartoonish images were quickly derided after their launch for mimicking images from popular video games and films.

The value of NFTs can also plummet if creators don’t get a marketing plan together or if the collection is supplanted by newer and shinier projects. Many NFTs that are simply digital images -- so-called PFPs, or profile pictures -- are particularly vulnerable to price drops.

“In the current market, it’s a pump-and-dump cycle among PFPs which is why this is leading to a decrease in the market,” WhaleShark said. “Not enough new money coming in to support PFP projects. Similar to a pyramid scheme.”

Demand also appears to be concentrated. The number of repeat buyers outweigh new entrants by a ratio of seven-to-one, according to Nansen. Overall, the number of total NFT buyers is up significantly from a year ago, though that number appears to have peaked in early February, the researcher found. On March 15, there were about 92,000 secondary sales and about 22,000 sales of newly minted NFTs, according to Nansen.

NFTs that have ceased to generate interest on trading platforms might still serve a broader purpose, much like the rest of the art and collectibles world.

“They are not dead,” said Javier Gonzalez, an engineer at Nansen. “You can still look at them. But some collections, they don’t trade, people are not interested -- they are just memories from the past, and that’s it.”