According to the inventor of Vee Friends, there would be problems with supply and demand because of the large number of celebrities, corporations, and musicians who jumped on the NFT bandwagon.
Gary Vaynerchuck, a well-known businessman and supporter of NFT, better known by his stage name Gary Vee, has said that the leading causes of the NFT market’s steep decline over the past year were overstock, greed, and substandard projects.
On December 12, Vaynerchuck promoted his most recent blog post, which examines the problems facing the NFT industry and where he believes it will be in the coming year, through Twitter.
Hope this article can help 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) December 11, 2022
Vaynerchuck commented on the market’s position and stressed that there had been a lot of fear, uncertainty, and doubt (FUD) from the media and social media users this year, who have often highlighted problems like declining trading volumes and floor pricing.
When it comes down to it, Vaynerchuck said, “If you’ve been paying attention, you know what’s happening here, and if you’re like me, you’re not surprised.”
He referred to his assertion from the previous year that “98-99% of NFT ventures” gained traction during the NFT bubble in 2021 will turn out to be poor investments or “go to zero.”
Difficulties with NFTs:
In defending this forecast, Vaynerchuck emphasised the overstock, short-term greed, and subpar operators as the three main factors hindering the business.
The sheer number of “celebrities, influencers, sports leagues, big businesses and individual artists” who hopped on the bandwagon last year, according to Vaynerchuck, was sure to result in supply and demand concerns.
Most are not, he noted, adding that “some have been outstanding ventures managed by true operators who are focused on giving value to their communities.”
There is always a bubble waiting to burst when the demand cannot and will not keep up with the unprecedented supply.
Regarding short-term greed, Vaynerchuck contended that the industry had been hindered by too many people rushing to establish companies or trade NFTs to make a quick buck, leading to losses from scams and the implosion of projects with weak foundations.
Everyone is too egotistical, moves too quickly, and lacks consideration. He stated that everyone is treating this marathon like a gold rush and a micro sprint, which is why most people will lose.
More than 1,300 users were surveyed on Twitter in June by blockchain tracking software provider DEXterlab about their NFT purchasing patterns from late May to early June. Less than 42% of respondents had generated a profit at the time of the poll, even though 64.3% of respondents claimed to have purchased NFTs to “make money.”
In the meantime, he claimed that poor projects are a problem because “there are now a huge number of people with no real knowledge of things like business, long-term community building, culture, day-to-day operating of a staff, and creating demand.”
Where will NFTs be in 2023?
Vaynerchuck claimed that looking ahead to 2023, there isn’t likely to be another market boom similar to 2021, especially given that he doesn’t see the “macroeconomic landscape” improving anytime soon.
Vaynerchuck also compared the cryptocurrency and NFT industries to the internet boom of the late 1990s and early 2000s, during which numerous businesses failed, but the most powerful ones rose to supremacy.
“Due to an absurd amount of supply, many projects will crash and go out of business, like Pets.com, but some of them—about 1-3% of projects—will succeed and become the Amazons and eBays of the world. The question is, “How many of you are prepared to put in the necessary research to make wise investing decisions?
Early in 2021, Vaynerchuck invested in NFTs and launched his first project, VeeFriends, in May of that same year. Since then, he has invested in a variety of projects. VeeFriends, with $241.8 million in total sales volume, is the twentieth-ranked NFT collection, according to data from CryptoSlam.