According to the inventor of Vee Friends, the number of celebrities, corporations, and singers who joined the NFT bandwagon would create supply and demand issues.
According to prominent entrepreneur and NFT advocate Gary Vaynerchuck — also known as Gary Vee — oversupply, greed, and subpar projects are the primary causes for the NFT market’s significant decline over the past year.
On December 12, Vaynerchuck tweeted a link to his most recent blog post, which discusses the current issues in the NFT industry and where he feels it will go in the coming year.
Vaynerchuck argued, “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,”
He pointed back to a statement he made a year ago in which he asserted that “98-99% of NFT firms” that gained traction during the NFT bubble in 2021 would prove to be terrible investments or “go to zero.”
Problems with NFTs
Vaynerchuck clarified this prognostication by emphasizing three key market-restraining factors: oversupply, short-term greed, and incompetent operators.
Vaynerchuck predicted that last year’s inflow of “celebrities, influencers, sports leagues, large corporations, and individual artists” would raise supply and demand difficulties.
“Some have been amazing projects led by true operators who are focused on delivering value to their communities – most are not,” he observed, adding:
“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.”
Concerning short-term greed, Vaynerchuck argued that the industry has been hindered by too many individuals attempting to make a quick buck by launching companies or trading NFTs, resulting in losses to scammers and the implosion of projects with poor fundamentals.
Everyone is too self-centered, hasty, and reckless. “This is a marathon, but everyone is treating it like a sprint and a gold rush,” he wrote. “As a result, the majority will fail.”
From late May to early June, DEXterlab, a blockchain tracking software business, polled over 1,300 Twitter users regarding their NFT purchase habits. While 64.3% of respondents said they purchased NFTs “to make money,” just 42% had made a profit at the time of the survey.
On the topic of failing projects, he argued that because anybody can start an NFT initiative, “there are now a large number of people with no genuine competence in areas such as business, long-term community building, culture, day-to-day staff operations, and demand creation.”
Where do you see NFTs in 2023?
Vaynerchuck says that another market spike such to that of 2021 is improbable in 2023, especially since he does not expect the “macroeconomic landscape” to become favorable in the near future.
Moreover, Vaynerchuck compared the crypto and NFT industries to the internet boom of the late 1990s and early 2000s, during which a multitude of businesses failed but the strongest rose to prominence.
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 began investing in NFTs in early 2021, with the debut of VeeFriends in May of that year. He has since invested in a number of other ventures. According to CryptoSlam data, VeeFriends is the twenty-first ranked NFT collection in terms of total sales volume, with $241,8 million.
Source NFT Newspro
