Analyzes the state of the NFT market through the lens of Gary Vaynerchuk
- NFT investor attributed NFT’s fall to three core issues
- Metrics painted a bearish future for NFTs
Prominent investor Gary Vaynerchuk, who became famous for his massive support of NFTs, shared his thoughts on the NFT market on 11 December. According to him, the NFT sector is going through a downturn with falling prices and declining popularity.
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
— Gary Vaynerchuk (@garyvee) 11 December 2022
What are the core issues plaguing the NFT market?
According to a blog post published on his website, Vaynerchuk attributed the NFT market’s current situation to three core problems: Oversupply, short-term greed, and inferior operators.
He expanded on oversupply, stating that there were simply too many NFT projects. The hype around digital art, along with support from celebrities and influencers, led to the launch of too many NFT projects. The problem was simple: there just wasn’t enough demand.
This particularly resonated with the NFT boom of 2021, where a number of celebrities launched NFTs. The crypto bull run only made it more appealing.
Interestingly, Gary Vaynerchuk had tired back in November 2021,
“98-99% of NFT projects from this ‘NFT Year 2021’ will end up being bad investments.”
Short-term greed and shady projects
Vaynerchuk compared the NFT boom of 2021 to the internet stock boom and subsequent dotcom bubble crash of 2000. According to him, investors saw the technology as a source of exponential returns. This led to investments without due diligence and consideration. Bad actors took advantage of this by setting up fraud projects with the aim of deceiving investors.
Quality was not the only concern here. Volume was also a worrying aspect of the NFT market. According to Gary Vaynerchuk, anyone can start an NFT project. Ease of access has effectively made way for bad NFT projects with no demand.
A look at what’s to come
Several metrics painted a bearish picture for NFTs. This included falling sales volumes, floor prices at record lows and a general reluctance by investors to put money into projects.
Data from Crypto slime showed that NFT trading volume across all sectors took a 60% hit this year. Cryptopunks and Art Gobblers, two famous ones projectshave seen declines of 21% and 95% respectively in the past month.
While this decline may discourage retail investors, corporate interest in NFTs was at an all-time high. According to United States Patent and Trademark Office attorney Mike Kondoudis, there have been three times as many trademark applications for NFTs and related blockchain products in 2022 as compared until 2021.
