ELI5: why do nfts lose value

NFTs lose value because people decide they're not worth as much anymore, just like toys or trading cards.

Imagine your favorite trading card. It might be super cool and rare, right? An NFT is kind of like a digital trading card. Now, think about why that trading card might lose value:

• Nobody wants it anymore: Maybe everyone is into a new game now, and your card isn't cool anymore. Similarly, if people lose interest in a particular NFT collection or the artist who made it, the NFT's value can drop.
• There are too many of them: If suddenly a million copies of your rare card are printed, it's not so rare anymore! The supply went up, but the demand (how many people want it) stayed the same. Some NFT projects release too many NFTs, making each one less special.
• The thing it represents isn't cool anymore: Imagine your card is of a player who suddenly retires and no one remembers them. The card loses its appeal. An NFT might represent a piece of digital art, music, or even a virtual land. If that digital thing becomes less popular or the platform it exists on shuts down, the NFT's value could go down.
• People think it's a scam: Imagine someone selling a fake rare card. Once people find out it's fake, the value drops to zero! Sometimes, NFT projects are scams, and people lose money when the truth comes out.