NFT expert OKhotshot declares that the majority of investors would lose money when they participate in the market since there are no trustworthy, steady investments in the NFT sector.
“OKHotshot,” a blockchain investigator and nonfungible token (NFT) expert, has selected 18 of the most “uncomfortable realities” regarding the NFT sector.
On August 27, OKHotshot exposed many of the problems affecting the NFT sector in a long 20-part thread to his 45,000 followers on Twitter.
This includes ventures that are nearly always doomed to failure, reckless celebrity endorsements, and hacking.
The analyst gained notoriety in the sector as a full-time on-chain analyzer with a focus on NFT audits and Discord security who used the Twitter handle @NFTheder.
Most NFT investors will experience losses.
The majority of individuals who invest in NFTs will lose money, which is one of the most depressing “uncomfortable realities” mentioned by the NFT analyst.
When an investor hears the phrase “blue chip NFT,” OKHotshot advises them to “run away” since there are “no guaranteed steady investments in NFTs.”
He also cautioned that grabbing gains when they are available rather than “diamond handing” is the greatest approach for investors to generate money.
“We are NOT all going to make it. Most NFT traders trade at a loss.”
Prior to this, a study revealed that although 64.3% of respondents said they purchased NFTs in order to gain money, 58.3% reported they had actually lost money.
Keeping up with announcements is important for anybody interested in NFTs, according to the analyst, since “by the time you learn about a new initiative on Twitter spaces, you are late.”
Additionally, he cautioned that preparation is crucial since time is more expensive than any asset and that volume and liquidity are often more important measures than the floor price.
“You can’t collect gains if there are no customers,” he said.
Most NFT initiatives are unsuccessful.
The NFT analyst also advises anybody interested in participating early in a specific NFT project to exercise caution since tokens often fail to maintain a price above the mint price, and derivatives “rarely outperform the initial NFT collections,” the expert said.
After releasing the completed image for its much-awaited project in March of this year, NFT project Pixelmon sparked criticism since the quality fell well short of expectations.
Each NFT was issued for three Ether (ETH), which resulted in a projected revenue of around $70 million.
However, the floor price on the OpenSea NFT exchange has fallen to only 0.26 ETH, which is now worth around $370.
Another NFT project, Phantabear, which debuted in January for 6.36 ETH and set records for trading volumes on OpenSea, has also had a sharp decline in value since then; as of the time of this writing, the floor price is just 0.32 ETH ($463).
According to a March report by blockchain analytics company Nansen, the majority of NFT collections either generate no revenue or generate less than they cost to produce.
OKhotshot states that Influencers and celebrities are uninformed
The shared “uncomfortable facts” include some criticisms of influential people and celebrities.
Celebrity NFT initiatives are well-known for being terrible investments, despite what well-known influencers may assert or suggest via social media postings, according to OKHotshot.
“Web2 marketing is highly unsuccessful in the NFT sector,” he said.
There has recently been news of warning letters sent by a consumer protection organization to roughly 20 celebrities for their support of NFTs.
The last arguments made by OKHotshot center on the notion that most NFTs lack any inherent value.
The analyst issued a warning that NFT projects without sale terms are useless and that NFT advantages only accrue to downstream buyers if specifically stated in the conditions.
“NFT projects without sale terms are selling you a token ID with a hyperlink to an off-chain asset. Without terms, nothing is defined. You can’t own a hyperlink so in all likelihood you bought nothing.”
Nevertheless, he asserts that hype and market speculation continue to drive up the price of NFTs, saying that astute investors should “take advantage of this.”