NFT
Popular entrepreneur and NFT proponent Gary Vaynerchuck — also known as Gary Vee — has argued that oversupply, greed and subpar projects are the main reasons the NFT market fell so hard over the past year.
Vaynerchuck posted his latest blog via Twitter on Dec. 12, which examines the NFT sector’s current issues as well as where he sees it going next year.
Hope this article can help some of you, the feedback has been humbling …. Why I Said 97-99% of NFTs Would Go to Zero – Gary Vaynerchuk https://t.co/BmhO7OUGdH
— Gary Vaynerchuk (@garyvee) December 11, 2022
Vaynerchuck spoke out about the state of market and said there had been a lot fear, uncertainty and doubt this year from media and social media users. These people have generally focused on issues such as declining trading volumes and low floor prices.
“The truth is, if you’ve been paying attention, you know what’s really happening here – and if you’re like me, you’re not surprised, argued Vaynerchuck.
He pointed back to a prediction he made a year prior in which he argued that “98-99% of NFT projects” that gained traction during the NFT boom in 2021 will end up being bad investments or “go to zero.”
NFTs and problems
Explaining this prediction, Vaynerchuck highlighted three major issues holding back the market — oversupply, short-term greed and poor operators.
In terms of oversupply, Vaynerchuck argued that the large number of “celebrities, influencers, sports leagues, big brands and individual artists” that jumped on the bandwagon last year was bound to cause supply and demand issues.
“Some have been amazing projects led by true operators who are focused on delivering value to their communities – most are not,” he wrote, adding that:
“The demand has not and will not be able to keep up with that extraordinary level of supply, and any time that happens, there’s a bubble waiting to burst.”
Vaynerchuck argued, in terms of short-term greed that the industry is hampered because too many people rush to make a quick buck by trading NFTs or launching new projects. This results in scams and imploding projects with weak fundamentals.
“Everyone’s way too selfish, way too fast, and lacking thoughtfulness. This is a marathon, but everyone’s treating it like a micro sprint and a gold rush, and that’s why most will lose,” he wrote.
DEXterlab, a blockchain monitoring software company, polled over 1,300 people on Twitter in June about their NFT purchasing habits between late May and early June. It found that 63% of its respondents purchased NFTs to make money. However, only 42% of those polled had made a profit.
Meanwhile, on the subject of bad projects, he suggested that as anyone can simply launch an NFT project “there’s now a huge number of people with no real knowledge of things like business, long-term community building, culture, day-to-day operating of a staff, and creating demand.”
NFTs: Where will they go in 2023
Looking forward into 2023, Vaynerchuck argued that there’s unlikely to be another market boom like that of 2021, particularly as he doesn’t see the “macroeconomic landscape” turning bullish anytime soon.
Additionally, Vaynerchuck likened the crypto and NFT sector to the internet boom of the late 1990’s and early 2000’s, in which a countless number of companies crumbled while the strongest rose to dominance.
“Due to a ridiculous amount of supply, many projects will crash and go to zero like Pets.com, but there will be some – that 1-3% of projects – that will become the Amazons and the eBays. The key is… how many of you are willing to do the homework it takes to make smart investments?”
Vaynerchuck invested in NFTs early in 2021. He launched VeeFriends, his debut project, in May that same year. According to CryptoSlam data, VeeFriends ranks twenty-eighth in NFT collections in terms of total sales volume with $241.8 million.