NFT analyst, and blockchain detective OKhotshot has warned that there is no reliable stable investment in the NFT space and most investors will lose money when investing in the market.
OKHotshot highlighted 18 of the most uncomfortable facts about the NFT industry.
In a 20-part post to his 45,000 followers on Twitter on Saturday, OKHotshot presented many of the issues currently plaguing the NFT industry, including endorsements of irresponsible celebrities, cybercrime, and failed projects.
This analyst has established himself in the industry as an on-chain analyst specializing in NFT auditing and Discord security operating under the name @NFTheder on Twitter.
Most NFT investors will lose money
One of the “nasty facts” shared by the NFT analyst is that most people will lose money when investing in NFTs.
OKHotshot says there is no reliable stable investment in NFTs. He warned that if investors hear the term “blue chip NFT” they should stay away. He added that “diamond handing” is not the best way to make money, instead, investors should take profits when they can.
“We are all NOT successful. Most NFT traders lose money.”
One poll found that while 64.3% of respondents said they bought NFTs to earn money, 58.3% said they lost money in their NFT cryptocurrency journey.
The analyst advises anyone interested in NFTs to keep up to date with announcements because, by the time you hear about a new project on the Twitter space, you’re already late.
He also cautions that volume and liquidity are often more important measures than floor prices and time is worth more than any asset, so planning ahead is essential.
“Without buyers, you can’t make a profit.”
5. By the time you hear about a new project on Twitter spaces, you are late.
— OKHotshot (@NFTherder) August 27, 2022
The majority of NFT projects fail
The NFT analyst also warned anyone interested in getting involved early in a particular NFT project as tokens are often not above the mint price, and derivatives are rarely better than original NFT collections.
The Pixelmon NFT project caused controversy in March this year after revealing the finished work for the project and its quality was much lower than expected.
The project has raised around $70 million, with each NFT minted for 3 Ether (ETH). However, the floor price on the OpenSea NFT marketplace has plummeted to just 0.26 ETH, worth around $370 at the time of writing.
Phantabear, another NFT project, was originally minted with 6.36 ETH and drove record trading volumes on OpenSea when it was first released in January. But the project has also seen a big drop in value since then, with a floor price of just 0.32 ETH, or $463 at the time of writing.
A March study by blockchain analytics firm Nansen found that most NFT collections either don’t make money or end up earning less than they cost.
Are Celebs and influencers “innocent”?
Some of the shared “uncomfortable truths” are causing celebrities and influencers to be criticized.
OKHotshot says that despite what influencers or celebrities claim or imply through social media posts, celebrity NFT projects are bad investments.
“Web2 marketing is extremely inefficient in the NFT market.”
16. Nobody has a real clue what they're doing.
— OKHotshot (@NFTherder) August 27, 2022
Recently, the incident of warning letters posted by a consumer watchdog group to nearly 20 celebrities for their role in NFT payments further caused the community to lose confidence in celebrities.
“NFT projects don’t have terms of sale, it’s selling you hyperlinked token IDs to off-chain assets. There are no terms, nothing is defined. You can’t own a hyperlink so chances are you’re not buying anything at all. “
OKHotshot believes that the price of NFTs continues to be controlled by hype and market speculation, noting that savvy investors can use this to profit.
