Gary Vee, entrepreneur and NFT proponent, has argued that the oversupply of bad projects, greed, and under-valued products is what caused the markets to decrease so quickly this past year.
Vaynerchuck noted that there has been a large amount of negativity in the media and social media this year. Overall, he said they’ve highlighted issues such as dwindling trading volumes as well as low floor prices.
“The truth is, if you’ve been paying attention, you know how this goes. And if I’m like you, I don’t care — because the boat has sailed on bitcoin,” said Vaynerchuck.
He pointed back to a prediction he made a year ago, where he predicted that 98-99% of NFT projects (products) that gained traction in 2021 would end up being bad investments or would “go to zero.”
The NFT monopoly is a problem
In this prediction, Vaynerchuck highlighted three major issues that are preventing the market from taking off. The first issue he noted was an oversaturation of products, where there’s more content, goods and services than consumers need to buy. Secondly, there’s a lot of greed and corruption in the market which is leading some business owners to focus on short-term gains rather than long-term growth. And finally, a lot of people starting businesses don’t know what they’re doing which leads to poor operations and low quality products.
Last year, a lot of celebrities and influencers jumped on the bandwagon, which caused oversupply in the market. This made it difficult for the market to balance out supply and demand.
“The demand has not and will not be able to keep up with that extra-ordinary level of supply, and any time that happens, there’s a bubble waiting to burst.” According to Vaynerchuck, the blockchain industry has been hurt by many people in the space rushing to make quick money by launching projects or trading NFTs. The result is losses to scams and projects with poor fundamentals imploding.
“Everyone is too selfish and going too fast,” he wrote. “This is a marathon, but most people take it like a micro sprint and a gold rush, which is why they’ll all lose.”
Recently, blockchain monitoring software company DEXterlab polled more than 1,300 people on Twitter about their NFT buying habits for the month of June. Most respondents reported that they bought NFTs “to make money,” but only 42% had made a profit at the current time.
While NFT projects do have their drawbacks, Vaynerchuck also said that “there’s 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 are NFT’s going in 2023
As 2021 winds down, Vaynerchuck argued that there is unlikely to be another boom like this in the world of business. He doesn’t see the macroeconomic forecast turning bullish any time soon.
In the grand scheme of things, a lot of businesses fail. Jim Vaynerchuck likened the crypto and NFT sector to when internet companies were founded in the late 1990s and early 2000s. Around that time, many companies crumbled while others thrived.
“There will always be a huge stalemate between supply and demand, but it’s important to note that not all projects will crash and go to zero like Pets.com. There will be successful projects like Amazon and eBay – the 1-3% of projects that are able to make smart investments.” Vaynerchuck jumped into NFTs back in early 2021 with his debut project VeeFriends. According to data compiled by CryptoSlam, VeeFriends is the 20th-ranked NFT collection for all time sales volume, at $241.8 million.