Blockchain News

NFT Market Held Back by Oversupply, Greed and Bad Projects: Gary Vee

The Vee Friends inventor predicted supply and demand challenges due to the amount of celebrities, corporations, and artists joining NFT.

Oversupply, greed, and poor projects, according to popular entrepreneur and NFT proponent Gary Vaynerchuck (Gary Vee), caused the NFT market to crash last year.

Vaynerchuck tweeted his newest blog piece on Dec. 12 on the NFT sector’s difficulties and his predictions for next year.

Vaynerchuck said that the media and social media have spread a lot of fear, uncertainty, and doubt (FUD) this year about declining trade volumes and floor prices.

“If you’ve been paying attention, you know what’s really happening here – and if you’re like me, you’re not shocked,” Vaynerchuck said.

He cited his 2021 estimate that “98-99% of NFT ventures” that gained momentum during the NFT boom will fail or “go to zero.”

Vaynerchuck blamed overstock, short-term greed, and incompetent operators for this forecast.

Vaynerchuck said that last year’s influx of “celebrities, influencers, sports leagues, huge corporations and individual artists” caused overstock.

“Some have been amazing projects led by true operators who are focused on delivering value to their communities – most are not,” he wrote, adding that: \s“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.”

In respect to short-term greed, Vaynerchuck said that the sector has been impeded by too many individuals rushing to make a fast profit from creating companies or trading NFTs, resulting in losses to scammers and enterprises with bad fundamentals implosion.

“Everyone’s greedy, quick, and thoughtless. This is a marathon, but everyone’s approaching it like a mini sprint and a gold rush, and that’s why most will lose,” he added.

In June, blockchain tracking software startup DEXterlab queried more than 1,300 users on Twitter about their NFT purchase patterns from late May to early June. It discovered that although 64.3% of its respondents indicated they purchased NFTs “to earn money,” fewer than 42% had generated a profit at the time of the study.

Meanwhile, on the matter of terrible projects, he said that since anybody can just establish an NFT project “there’s suddenly a big number of individuals with no actual expertise of things like business, long-term community development, culture, day-to-day operation of a workforce, and generating demand.”

Vaynerchuck predicted that the “macroeconomic environment” won’t turn optimistic in 2023, making another market boom improbable.

Additionally, Vaynerchuck compared the crypto and NFT industry to the internet bubble of the late 1990’s and early 2000’s, in which an endless number of enterprises perished while the strongest climbed to prominence.

Due to a ludicrous quantity of supply, many ventures will fall and go to zero like, but 1-3% will become the Amazons and eBays. How many of you are willing to conduct the research to make good investments?

Vaynerchuck started investing in NFTs in early 2021, launched VeeFriends in May, and has invested in other startups since then. CryptoSlam ranks VeeFriends twentieth in NFT sales volume at $241.8 million.

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.