- Global winter and restrictions
- Forecast of collapse
- Celebrity followers back down
- NFT prices: everything is relative
At Gary Vaynerchuk’s VeeCon conference on non-interchangeable NFT tokens in Minneapolis, there were no visible signs of a market crash. However, in the previous six weeks, more than $1 trillion of crypto assets had been destroyed, while the value of NFT had fallen more than 80% from their market peak.
The collapse of NFT is not the only event in the crypto market. Cryptocurrencies are collapsing and pessimists are predicting a complete collapse of the crypto market. For now, big companies are going for a series of measures to stay afloat and restore the crypto economy.
Coinbase, the most popular of the US digital currency trading platforms, just announced an indefinite hiring freeze. The firm will cancel some job offers made to candidates.
Gemini, another platform for buying and selling cryptocurrencies, is also cutting costs. And that means job cuts. The firm was founded in 2014 by twin brothers Cameron and Tyler Winklevoss, who gained notoriety after they and a classmate claimed that Mark Zuckerberg had stolen their idea for Facebook.
Cameron and Tyler wrote in a blog post: “The crypto revolution is well underway and its impact will continue to be profound. But its trajectory has been anything but gradual or predictable. Its path can best be described as punctuated equilibrium — periods of equilibrium or stasis that are punctuated by dramatic moments of hypergrowth, followed by sharp contractions that settle down to a new equilibrium that is higher than the one before.”
They called what is happening a crypto winter. Despite the youth of the crypto space as a whole, this is not the first recession. The last episode of crypto winter lasted from 2018 through the fall of 2020 before prices recovered and soared to record highs in 2021.
For the entrepreneur and celebration host, the steep losses in the cryptocurrency industry simply proved his point: Vaynerchuk, or Gary Vee as he is often called, repeatedly predicted this collapse or “NFT Winter.”
“I said it in August, I said it in July, and I said it in May,” Vaynerchuk said.
Vaynerchuk is the founder of the VaynerMedia and VaynerSports brands. He also created an NFT signature collection called VeeFriends. By his own account, Gary is one of NFT’s top enthusiasts and goes a step further.
The reason is excessive speculation. Crypto speculation “was as crazy as internet stocks in the late ’90s being worth $400 billion for Pets.com,” Vaynerchuk said, comparing the NFT boom to the dot-com bubble. “The internet was coming, it was gonna change the world. The valuations on Wall Street were overblown. The valuations on NFTs in this first year are overblown… but the fundamentals are real. The macro is super right — NFTs are here forever. The micro is wrong, that’s why we’re correcting.”
As an example, Vaynerchuk cited the concept of tickets for live events.
“Why should a ticket be a QR Code?” he said. “A ticket being an NFT that’s worth something after the game is much more realistic.”
After the collapse, celebrity followers who had showed an affinity for crypto, NFT and Web 3 began to turn back and declare less and less enthusiasm.
A New York Times article emphasized that the celebrities who earlier participated in crypto ads, including Matt Damon, Gwyneth Paltrow, Reese Witherspoon and LeBron James, have remained silent during the market crash.
“I think for celebrities, they have to be careful to who and what they endorse, what they support,” Vaynerchuk said. “But I think it’s ludicrous for people to blame them on the price.” In his opinion, it is not celebrities that have made such a difference in the economic situation in the world that affects the crypto market.
While geopolitical events, rising inflation and a falling stock market have driven down the value of cryptos and NFTs, this is not the case with other collectibles.
A 1955 Mercedes recently broke the world auction price record, selling for $143 million.
Andy Warhol’s Marilyn Diptych sold for $195 million, the Macklowe Art Collection grossed $922 million, and New York’s largest art houses Christie’s, Sotheby’s and Phillips have earned more than $2.5 billion in sales since the beginning of 2022. This shows a return of interest in “physical” objects, those that can be owned in the real world.
In light of this turn of events, Vaynerchuk said NFT prices are relative.
“They’re down from the completely unsustainable gold rush numbers of January. They’re also so up from a year ago, and it’s not even close,” he said. “And so this is what always happens. I was there when everybody wrote articles and said the internet was a fad.”
A group of several thousand of Vee’s passionate friends has not lost their enthusiasm. Hundreds of them stood in line for hours to get a chance to take selfies and exchange a few words with Vaynerchuk.
Web 3 followers believe that while most projects will disappear when greed goes away and mass speculation stops, it will be a good time for cryptocurrency and NFT.