Gary Vee has stated that the rapid influx of celebrities, brands, and artists into the NFT market has led to an oversupply of NFTs, which has contributed to the recent decline in the market. He also believes that greed and the presence of low-quality NFT projects have further hindered the market's growth. In a recent tweet, Vee promoted a blog post in which he discusses these issues and offers his predictions for the NFT market in the coming year.
Gary Vee has noted that there has been a significant amount of negativity and skepticism surrounding the NFT market this year, including concerns about declining trading volumes and falling prices. He believes that this "fear, uncertainty, and doubt" from traditional and social media sources has contributed to the market's struggles. He 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.”
Vee has previously predicted that the vast majority of NFT projects that gained popularity in 2021 would ultimately be poor investments or would fail entirely. He believes that this outcome has come to pass, and that it has contributed to the market's current struggles.
The Issues With NFTs
Vee explaining his prediction, see that the majority of NFT projects would fail is based on three major issues currently facing the market: oversupply, greed among market participants, and the presence of poor operators. He believes that the large number of celebrities, influencers, sports leagues, brands, and individual artists who entered the NFT market last year has led to an oversupply of NFTs, which has contributed to the market's struggles. He wrote:
“Some have been amazing projects led by true operators who are focused on delivering value to their communities — most are not. 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.”
Regarding short-term greed, Vaynerchuck contended that the industry has been hindered by too many people rushing to launch projects or trade NFTs in order to make a quick buck, leading to losses from scams and the implosion of projects with weak fundamentals. He stated:
“Everyone’s way too selfish, way too fast, and lacking thoughtfulness. This is a marathon, but everyone’s treating it like a micro sprint and a gold rush, and that’s why most 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 made a profit at the time of the poll, despite the fact that 64.3% of respondents claimed to have purchased NFTs in order to "make money."
In the meantime, Vaynerchuck made the argument that since anyone can easily start an NFT project, there are now a lot of people with little to no experience in areas such as business, long-term community building, culture, managing a staff, or creating demand.
NFTs' Place by 2023
Vaynerchuck claimed that, looking ahead to 2023, there isn't likely to be another market boom like to that of 2021, especially given the fact that he doesn't anticipate the "macroeconomic picture" improving anytime soon.
Additionally, Vaynerchuck compared the cryptocurrency and NFT industries to the internet boom of the late 1990s and early 2000s, when a great number of businesses failed but the most powerful emerged as the market leaders.
“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?”
Early in 2021, Vaynerchuck entered the NFT market, and in May of that same year, he released his first product, VeeFriends. Since then, he has contributed to numerous endeavors. VeeFriends, with $241.8 million in sales volume, is the 20th-ranked NFT collection overall, according to data from CryptoSlam.