Famed entrepreneur and NFT proponent, Gary Vaynerchuck — aka Gary Vee — has argued that oversupply, greed, and substandard projects are the main reasons why the NFT market has fallen so hard over the past year.
On Dec. 12, Vaynerchuck used Twitter to highlight his latest blog post, which explores the current issues of the NFT sector and where he thinks it will go next year.
Commenting on the state of the market, Vaynerchuck emphasized that there has been a significant amount of fear, uncertainty and doubt (FUD) from traditional media as well as social media this year, with a general spotlight on issues such as dwindling trading volumes and falling floors. the prices.
“The truth is, if you’re paying attention, you know what’s really going on here — and if you’re anything like me, you won’t be surprised,” Vaynerchuck said.
He referred to his prediction a year ago, in which he argued that “98-99% of NFT projects” that gained traction during the NFT boom in 2021 will either end up as bad investments or “go to zero.”
Problems with NFTs
In explaining this forecast, 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, major brands and individual artists” who joined the bandwagon last year was bound to cause supply and demand issues.
“Some of them were great projects led by real operators focused on delivering value to their communities — most of them are not,” he wrote, adding the following:
“Demand has not and will not be able to keep up with this extraordinary level of supply, and any time that happens, there is a bubble waiting to burst.”
In terms of short-term greed, Vaynerchuck argued that the industry has been held back by so many people rushing to make a quick profit from launching projects or trading NFTs, resulting in losses in scams and projects as weak fundamentals collapse.
“Everyone’s road is too selfish, too fast, and lacks thought. This is the marathon, but everyone treats it like a sprint and a gold rush, which is why most of them will lose.”
In June, blockchain monitoring software firm 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 while 64.3% of respondents said they bought NFTs to “make money,” less than 42% had made money at the time of the survey.
Meanwhile, on the topic of bad projects, Vaynerchuck suggested that since anyone can simply launch an NFT project “there are now a significant number of people who don’t have real knowledge of things like business, long-term community building, culture, and day-to-day staffing.” and create demand.”
Where are NFTs heading in 2023?
Looking ahead to 2023, Vaynerchuck argued that there isn’t likely to be another market boom like the one in 2021, especially since he doesn’t see the “macro landscape” turning bullish anytime soon.
In addition, Vaynerchuck likens the cryptocurrency and NFT sector to the internet boom of the late 1990s and early 2000s, when countless companies collapsed while the most powerful ones rose to dominance.
“Because of the ridiculous amount of supply, many projects will crash and go to zero like Pets.com, but there will be some — those 1-3% of projects — that will become Amazon and eBays. The key is… how many of you are willing to do the homework needed to make smart investments?”
Vaynerchuck jumped into NFTs again in early 2021 and went on to launch his first venture, VeeFriends, in May of that year. He has invested in a number of projects since then. According to data from CryptoSlam, VeeFriends is the 20th largest NFT pool by turnover of all time, with a value of $241.8 million.