Coinbase Investor: NFT Market Overly Speculative, Supply-Demand Imbalance, Most Projects Will Face a Crash

Coinbase investor and prominent NFT entrepreneur Gary Vaynerchuk shared his views on the current NFT market in a joint interview with Decrypt and Yahoo Finance today, stating that he believes NFTs will evolve over time and gradually become integrated into people's lives.

Is the NFT Market Heading for a Bearish Trend?

In August of this year, the NFT market experienced a frenzy, with a monthly trading volume exceeding $3 billion. Gary Vaynerchuk played a significant role in this phenomenon by purchasing a CryptoPunk for 1,600 ETH, approximately $3.7 million, at the end of July, sparking a wave of CryptoPunks trading in the market.

However, during a joint interview today with Decrypt and Yahoo Finance, Gary Vaynerchuk expressed skepticism about the current trend of the NFT market, stating:

"As NFTs head into winter, the conversation around them is going to get very interesting. There's too much short-term speculation and supply-demand issues right now."

Although Gary Vaynerchuk did not mention when a correction might occur, he compared the current NFT market to the stock market during the dot-com bubble of 2000 and used Amazon stock as an example. It dropped from $106 in 2019-2020 to $8.3.

"Everything is in the shadows because greed and short-term economic gain have overvalued everything. Now is the time to buy Amazon and eBay; they are the real companies," Gary Vaynerchuk said.

NFT Market Data

According to data from Dune Analytics on OpenSea, the number of monthly active users in the second half of this year has continuously reached new highs, but the daily trading volume has been declining since the peak at the end of August.

While many novel NFT projects continue to emerge, bringing new blood into the NFT market, the decreasing trading volume seems to indicate that many NFT projects are severely undersold. If this situation persists for an extended period, a market collapse is inevitable.

Blue-Chip Projects Will Be More Valuable

During the interview, Gary Vaynerchuk stated that most NFT projects will lose value over time, but blue-chip projects will rise to greater heights. Determining which NFT projects have potential will require a lot of effort.

According to data from NFTGO, the top two projects in the market, CryptoPunks and Art Blocks, account for approximately 35% of the total market value, while the top 10 together make up about 57% of the value. If Gary Vaynerchuk's words come true, the market's direction will become more extreme, with the value of most projects decreasing in the market.

The Future of NFTs

When asked about the future uses of NFTs, Gary Vaynerchuk confidently stated that although NFTs have only recently been invented, with the high transparency of smart contracts, they will become more and more prevalent in daily life.

"NFTs will be everywhere in everyone's life, and they will become more meaningful," Gary Vaynerchuk said.