Popular entrepreneur and NFT advocate Gary Vaynerchuck -also known as Gary Vee- has argued that oversupply, greed and low-quality projects are the main reasons why the NFT market fell so hard. last year.
On December 12, Vaynerchuck took to Twitter to highlight his latest blog post, which explores the current issues in the NFT industry and where he thinks it’s headed 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
Commenting on the state of the market, Vaynerchuck stressed that there has been a great deal of Fear, Uncertainty and Doubt (FUD) this year in both traditional media and social media, with both highlighting issues such as declining volumes of negotiation and the collapse of the minimum prices.
“The truth is, if you’ve been paying attention, you know what’s going on here, and if you’re like me, you’re not surprised,” Vaynerchuck argued.
He harkened back to a prediction he made a year earlier, arguing that “98-99% of NFT projects” that gained popularity during the NFT boom in 2021 would either end up as bad investments or “go to zero.” .
The problems with NFTs
To explain this prediction, Vaynerchuck highlighted three big issues holding the market back: oversupply, short-term greed, and bad traders.
As for the oversupply, Vaynerchuck argued that the sheer number of “celebrities, influencers, sports leagues, big brands and individual artists” jumping on the bandwagon last year was going to cause supply and demand problems.
“Some have been amazing projects run by true operators focused on bringing value to their communities; most are not,” he wrote, adding that:
“Demand has not and will not keep up with that extraordinary level of supply, and every time that happens, there is a bubble ready to burst.”
As for short-term greed, Vaynerchuck argued that the industry has been hampered by too many people rushing to make a quick buck by launching projects or speculating on NFTs, leading to losses from scams and the implosion of projects with poor fundamentals. .
“Everyone is too selfish, too rushed and unthinking. This is a marathon but everyone is treating it like a micro sprint and gold rush and so most will lose,” he wrote.
In June, blockchain monitoring software company DEXterlab surveyed more than 1,300 people on Twitter about their NFT buying habits during the period from late May to early June. It found that although 64.3% of respondents said they bought NFTs “to make money”, less than 42% had made a profit at the time of the survey.
Meanwhile, on the subject of bad projects, Vaynerchuck suggested that since anyone can just throw an NFT project off the ground “there are now a huge number of people with no real knowledge of things like business, building long-term communities, culture, the daily functioning of a staff and the creation of demand”.
Where are NFTs headed in 2023?
Looking ahead to 2023, Vaynerchuck argued that another market boom like the one in 2021 is unlikely, especially since he doesn’t see the “macroeconomic outlook” turning bullish any time soon.
Additionally, Vaynerchuck likened the cryptocurrency and NFT industry to the internet boom of the late 1990s and early 2000s, when countless companies fell apart as the strongest ones rose to dominance.
“Because of a ridiculous amount of supply, a lot of projects will crash and go to zero like Pets.com, but there will be some – those 1% or 3% of projects – that will become the Amazons and the eBays. The key is. ..how many of you are willing to do the necessary homework to make smart investments?”
Vaynerchuck jumped into NFTs in early 2021, launching his first project, VeeFriends, in May of that year. He has invested in various projects since then. According to CryptoSlam data, VeeFriends is the 20th largest NFT collection in terms of all-time sales volume, with $241.8 million.
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