NFT market held back by oversupply, greed and bad projects: Gary Vee
Popular entrepreneur and NFT advocate Gary Vaynerchuck – also known as Gary Vee – has argued that oversupply, greed and under-target projects are the main reasons why the NFT market fell so hard in the past year.
On December 12, Vaynerchuck highlighted his latest blog post via Twitter that explores the NFT sector’s current issues and where he thinks it’s headed next year.
Hope this article helps 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) 11 December 2022
Commenting on the state of the market, Vaynerchuck emphasized that there has been a significant amount of fear, uncertainty and doubt (FUD) from the media and social media users this year, which has generally highlighted issues such as declining trading volume and floor prices. .
“The truth is, if you’ve been paying attention, you know what’s really going on here — and if you’re like me, you’re not surprised,” Vaynerchuck argued.
He pointed back to a prediction he made a year earlier, in which he claimed 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. “
Problems with NFTs
To explain this prediction, Vaynerchuck highlighted three major problems holding the market back – oversupply, short-term greed and bad operators.
As for oversupply, Vaynerchuck argued that the sheer number of “celebrities, influencers, sports leagues, big brands and individual artists” jumping on the bandwagon last year was bound to cause supply and demand issues.
“Some have been fantastic projects led by real operators focused on delivering value to their communities – most are not,” he wrote, adding that:
“Demand has not and will not be able to keep up with the extraordinary supply, and every time that happens, it’s a bubble waiting to burst.”
As for short-term greed, Vaynerchuck argued that the industry has been hampered by too many people rushing to cash in on launching projects or trading NFTs, resulting in losses to scams and projects with poor fundamentals imploding.
“Everyone is far too selfish, far too quick and lacks consideration. This is a marathon, but everyone is treating it like a micro-sprint and a gold rush, which is why most will lose,” he wrote.
In June, blockchain monitoring software company DEXterlab asked more than 1,300 people on Twitter about their NFT buying habits from late May to early June. It found that while 64.3% of respondents said they bought NFTs “to make money”, less than 42% had made a profit at the time of the poll.
Meanwhile, regarding bad projects, he suggested that since anyone can just start an NFT project, “there are now a large number of people with no real knowledge of things like business, long-term community building, culture, day-to-day running of a staff, and create demand.”
Where are NFTs going 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 landscape” turning bullish anytime soon.
In addition, Vaynerchuck compared the crypto and NFT sector to the internet boom of the late 1990s and early 2000s, where countless companies crumbled while the strongest rose to dominance.
“Because of a ridiculous amount of offers, many projects will crash and go to zero like Pets.com, but there will be some – 1-3% of projects – that will become Amazons and eBays. The key is … how many of you are willing to do the homework required to make smart investments?”
Vaynerchuck jumped into NFTs in early 2021 and went on to launch his debut project VeeFriends in May of that year, and has invested in a number of projects since then. According to data from CryptoSlam, VeeFriends is the twentieth-ranked NFT collection in terms of sales volume at $241.8 million.
