Well-known investor Gary Vaynerchuk, who gained fame for his fervent backing of the non-fungible tokens (NFTs), gave his opinions on the NFT market, On December 11th. He claims that a slump in the NFT industry is occurring due to decreased sales and consumer interest.
In a blog post on his website, Vaynerchuk cited three main problems as the cause of the market’s current situation, such as inadequate operators, excessive supply, and short-term greed
He continued, “there are simply too many NFT projects” about oversupply. Too many NFT initiatives were started due to digital art’s buzz and celebrity and influencer endorsements. The primary issue was only that there wasn’t enough demand.
This was especially relevant given the 2021 NFT boom, during which several famous people launched NFTs. The cryptocurrency bull run only increased its allure.
Curiously, Gary Vaynerchuk had said in November 2021,
98-99% of NFT projects from this ‘2021 NFT Year’ will end up being bad investments.
NFT Vanity Projects & Short-Sighted Greed
Vaynerchuk compared the 2021 NFT boom to the 2000 dotcom bubble disaster that followed the internet stock boom. He claimed that investors saw the technology as a potential source of exponential returns. As a result, investments were made carelessly and without proper deliberation. Bad actors took advantage of this by launching phony ventures to defraud investors.
The issues here went beyond quality. A concerning element of this market was also the quantity. Anyone may launch an NFT, according to Gary Vaynerchuk. Poor NFT initiatives that have little demand have effectively benefited from easy access.
A number of metrics shed a negative light on the non-fungible tokens. This includes a widespread reluctance on the part of investors to fund projects as well as dwindling sales volumes and floor prices at all-time lows.
The volume of its trading across all industries decreased by 60% this year, according to data from Cryptoslam. During the previous month, two notable projects, Cryptopunks and Art Gobblers, experienced reductions of 21% and 95%, respectively.
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This slump may put off retail investors, but businesses continue showing keen interest in this market. Attorney Mike Kondoudis from the USPTO asserts that in 2022 compared to 2021, trademark applications for NFTs and associated blockchain products have increased by a factor of three.