Serial entrepreneur Gary Vaynerchuck is completely sold on non-fungible tokens (NFTs) but he still sees the red flags.
“I have pure conviction about this,” he said at an event in Tribeca called 3-2-1 Blast Off, a satellite event of NFT.nyc, the annual gathering for digital collectibles in New York City.
“NFTs work for me and altcoins and other coins don’t. I just have a lot more interest in storytelling, narratives. The idea of arbitraging currencies I just don’t understand as well and I’m not interested,” Vaynerchuck said.
Bloodbath is Coming
He’s very sold on NFTs, but he is also sure that there’s a bloodbath coming in that market. Vaynerchuck believes collectors are moving too quickly, following others without developing their own intuition and focusing too much on the dollar values.
“I believe there is 100% chance of a massive dip,” Vaynerchuck said, because he’s watching folks “ape in,” flipping tokens and jumping from project to project, only chasing gains. “I don’t know what’s going to happen but I know why it’s happening. Money blinds people like a motherfucker,” Vaynerchhuck said.
Vaynerchuck’s big advice for everyone in the room was to spend 40 to 50 hours studying projects or categories of assets before going all in. “I’m not comfortable doing shit I don’t know how to do,” he said, however, he believes lots of collectors are buying for no other reason than the fact that people they respect have bought in. “People are making a lot of decisions right now that aren’t their own,” Vaynerchuck said.
Vaynerchuck was on stage with Jimmy McNelis, founder of NFT 42, the creators of Avastars. McNelis argued that accountability is key to a good NFT project. “I am not a fan of anonymous founders at all.” McNelis said, repeating for emphasis.
McNelis was echoing a prior point that Vaynerchuck had made.
“People are supporting founders where they don’t even know their names or whether they are capable of building something,” Vaynerchuck said.
But the words of caution don’t mean that Vaynerchuck isn’t overall confident in the industry. He believes that NFTs will be everywhere throughout the economy soon. Though many of the projects built already will lose all their value, there will also be giant successes that will define the future.
“Everything I’m feeling right now is very much reminiscent of SxSW 2008, 2009 which very much laid the foundation for my entire career,” he said.