Gary Vaynerchuck, a popular entrepreneur supporting NFTs, has mentioned some factors badly impacting the NFT market, such as oversupply, greed, and subpar projects. He highlighted the NFT sector’s current issues and his forecasts for next year in a Twitter post.
Vaynerchuck put the emphasis on the amount of fear, uncertainty, and doubt (FUD) due to the media and users of social media this year. The spotlight has been on dwindling trading volumes and floor prices.
He mentioned his prediction a year prior in which he forecasted that “98–99% of NFT projects gaining traction during the NFT boom in 2021 will end up in downfalls to zero, even. And you can see that it did happen in the real market.
The benchmarks that Vaynerchuck used to forecast the NFT market are three major issues slowing down the market’s growth, including:
- Oversupply: He pointed out the participation of many celebrities, influencers, sports leagues, and big brands leading to the burst of NFT supply. To be fair, some have been wonderful projects by true operators. Yet, most NFT projects are not due to the imbalance between demand and supply, which makes waiting-to-burst bubbles.
- Short-term greed: NFT users might be triggered by the trend of making a quick buck from the launching projects of trading NFTs. Thus, it results in losses to scams and projects having poor fundamental implosions. Sprinting a gold rush needs a lot of skills and thoughtfulness rather than just speed. In the poll by the blockchain monitoring software company DEXterlab about NFT buying habits of over 1,300 people from late May to early June, the result was that 64.3% of its respondents said they bought NFTs “to make money” while fewer than 42% aimed at making a profit through NFTs.
- Poor Operations: It is easy to launch an NFT project while its founders do not have enough solid knowledge about business, long-term community development, daily operation of staff, the creation of demand, etc. Thus, such projects are easily on edge of collapse amid tumultuous price actions.
So, what did 2022 events in the crypto market tell us?
Painful hacks and CeFi (Centralized Finance) crashes like the corruption of FTX must have shaken the crypto industry. Yet, massive technological strides, specifically Web3, have reached many individuals. NFTs have become accessible, reliable, and safe for users around the world to usher in a transparent, dependable, and autonomous community. It totally changes our considerations of money, ownership, identity, and community. According to Coindesk, 2023 might continue the adoption of an economic layer to the internet.
Where are NFTs going in 2023?
Gary Vaynerchuck’s prediction is that 2023 might not witness a market boom like 2021. He compared the crypto and NFT sector to the internet boom of the late 1990s and early 2000s for insights into a countless number of collapsed companies while the strongest reached dominance.
A ridiculous amount of supply pushes many projects to crash like Pets.com. Only 1–3% of projects become the next Amazon and eBays. Yet, NFT users are not willing to do the homework to pick profitable items for smart decisions for not only short-term gains but also long-term profits.
Coindesk has published some noticeable NFT forecasts in 2023. This article highlights its DeFi’s forecasts for 2023.
DeFi (Decentralized Finance) will keep its momentum of growth. At large it has functioned flawlessly while CeFi (Centralized Finance) encounters a lot of freaking collapses, notably the FTX fallout. Highly-regulated players like Coinbase and Bitstamp prove the strength of regulation and developing sustainable environments. These companies guarantee assets via secure smart contracts, hence enabling users to grasp liquidity flows and have more dominance over their investments.
Some exciting examples are GMX, a decentralized perpetual exchange, and 1inch Pro, a regulatory-compliant platform for connecting traditional finance (TradFi) with DeFi. It is likely to have a transition in payments in 2023, such as self-custody wallets, synthetic assets, and prediction markets.
The sector’s true power lie in the base infrastructure that can help it stand against tough market conditions. These properties will greatly speed up DeFi’s adoption and growth in 2023, especially when CeFi faced up to severe disasters.
Stay tuned to our next article to update more forecasts of NFTs in 2023, such as
- The tremendous ZK adoption
- The tokenization of financial assets
- Emerging to leverage blockchain data
- The expansion of non-fungible tokens providing value to their holders
Meanwhile, you can read other articles deep diving into the crypto market such as
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