For the overwhelming majority of NFTs, the brutal bear market of the past two years was not just a phase. About 90-95% of NFT collections will never return to their pre-weak market value, Pedro Herrera, head of research at DappRadar, said recently. decryption.
If so, the question of what to do with the millions of now “worthless” JPEGs will grow for many NFT owners. One potential solution is to take these losses head on and leverage them to save on taxes.
Unsellable, a startup founded last year, buys illiquid NFTs penny-by-penny from exhausted holders, allowing owners to receive tax breaks, and has already helped customers report realized losses worth a total of $4.2 million. He claims he gave it to him.
Skyler Hallgren, co-founder of Unsellable, believes that amount is just the tip of the iceberg of a collapsed sector. Well over 90% Trading volume and activity have increased since just two years ago.
“There will be massive amounts of money locked up and unrealized losses due to the NFT bubble in 2021 – potentially $1 billion,” Hallgren said. decryption. “We can actually do something about it.”
Unsellable claims that the average user was able to write off $4,200 worth of losses in NFTs that had lost significant value. Last year, one of the platform’s users (Thomas Mancini, platform engineer at NFT portfolio app Floor) said he offset nearly $58,000 in NFT losses with Unsellable’s help.
A small collection of “blue chip” NFTs, including: Boring Monkey Yacht Club, Cryptopunkand chunky penguin It has maintained its value throughout the ongoing cryptocurrency winter. Unsellable has no effect on that item.
Instead, it curates a sort of graveyard for broken NFT toys, including rug pull projects, abandoned collections, and copycats riding coattails (think: Jack Ape Club, Wealthy Monkey Social Club, IRL punk, tit bird—and also includes the following wildcards: Damn my banana.)
In total, the Company has collected the following information: 26,000 NFTs until now.
“Some are weird, some are bizarre, some are funny. Very little of it is aesthetically interesting,” Hallgren said. “Most of them are derivative projects.”
The company said it purchases NFTs because it has no personal relationship with them. Because these holders have no expectation of being able to purchase the NFTs again at any point in the future, Unsellable says the scheme is perfectly legal, just like worthless stocks. buyback program.
Unsellable charges approximately $2 worth of ETH as a fee for every NFT transfer. The company was successful in flipping about 300 of the NFTs it acquired, most of which were modest paydays in the $30 to $200 range. But sporadic NFT flipping isn’t the point of Unsellable, its founders say.
“Our goal is to create the world’s largest collection of NFTs over time,” Hallgren said.
The entrepreneur is interested in one day selling the platform to a cryptocurrency tax company or cryptocurrency tax software company. Some of them have already discussed possible acquisitions, he said.
As for the thousands of NFTs that Unsellable already owns, he said several parties have expressed interest in purchasing the collection. Some people still hope that one of the thousands of dead or dying JPEGs may one day come back to life and skyrocket in value.
According to Hallgren, others would like to own the collection as a kind of museum piece. This captures the massive speculative excess born at the peak of the NFT market.
Editor: Andrew Hayward
