VaynerMedia CEO Gary Vaynerchuk speaks with Yahoo Finance's Dave Briggs about Web3 use cases on the blockchain, bitcoin, NFTs, a potential crypto winter, celebrity endorsements, and speculation.
- OK. CEOs around the globe were gassing up their jets for Davos. The crypto, NFT, and Web3 world was just wrapping up, the first ever VeeCon. That's a four-day conference hosted by Gary Vaynerchuk. Gary V has his own NFT collection. He calls it VeeFriends, and he predicted the very crash that we're currently seeing in the industry. I had a chance to sit down with the serial entrepreneur and talk all things Web 3.0.
GARY VAYNERCHUK: Web 3.0 captures a category of new things going on. For everybody watching, Web2 is what captured social media. Before we called them social media sites when we were first meeting, we called them Web 2.0 sites.
- It was 2009 when we first met.
GARY VAYNERCHUK: That's right. Facebook, YouTube, Twitter, they were called Web2 sites because it was like the web is growing up. This is Web3 which is kind of interesting because the blockchain is not the internet, but we're calling it Web3. And what Web 3 is, it's capturing the blockchain. It's capturing this concept called the metaverse, which is Oculus and things of that nature where you live in virtual reality. People have seen "Ready Player One," that movie. It's capturing that.
In practical terms, what it is owning something digitally. In it's most simplistic thing, you own something digitally. Now, the reason people struggle with that is you can't own anything digitally on the internet. People can go and right click and save an image, and then I have it on my phone. And you think you own it, but you don't own it.
Whereas in Web3, the blockchain allows you to own it. That's why Bitcoin was a big thing. You actually own those bitcoins. NFTs, you own these digital pictures and art. The part that people still don't get yet in 101 land is you can have a contract attached to that art that makes you do something no different than the contract behind your credit card.
For everybody who's really struggling, go talk to your grandparents, they'll take you two seconds. If you're 57 watching this, 32, go talk to your grandparents if you're lucky enough to have them and ask them how everybody felt about the credit card in the '70s when it was first introduced. Every single guy 25 to 99 years old when they first heard about the credit card in 1972 said, I'm never getting that. I got cash. I'll never give up cash. There's not a person on Earth that walks around with cash now. And so that's exactly what's going to happen.
- How much you got on you?
GARY VAYNERCHUK: I have--
- You have cash?
GARY VAYNERCHUK: I do have a little bit. I have $102.
- Thank you. I appreciate that.
GARY VAYNERCHUK: You're welcome.
- That's nice of you, Gary.
GARY VAYNERCHUK: Happy to do it.
- I'm going to read you a quote.
GARY VAYNERCHUK: Please.
- And I don't know if you recognize it. It's from November of '21. So not that long ago, but it feels like light years ago. "An NFT winter is coming, a crash driven by short-term greed, supply and demand issues." Who said that?
GARY VAYNERCHUK: Me.
GARY VAYNERCHUK: I also said--
- Is that what we're in right now?
GARY VAYNERCHUK: I also on the record wish you went back a little further because I also said it in August and I said in July and I said it in May. I saw this coming. That is absolutely potentially what we're in. It's just starting. There's a correction. There was a correction January. There's was a correction in other times. So we need more sustained time for Ethereum to stay at this price, for the best projects to stay at this price.
But my hope is that's what we're in. So everybody who's watching, the prices went crazy. You probably heard at this point like this NFT is worth a million dollars, a half a million dollars. And you thought it was crazy. And in reality, you were right. It was crazy. It was a crazy as internet stocks in the late '90s being worth $400 billion for pets.com. The internet was coming. It was going to change the world.
The valuations on Wall Street were overblown. The valuations of NFTs in this first year are overblown because people get overexcited, gold rush, short term, quick cash. But the fundamentals are real. And that's why people are confused. The macro is super right, NFTs are here forever. The micro was wrong that's why we're correcting.
- I'm sure you saw the "New York Times" piece this week. Where are those celebrities that were Hawking crypto and NFTs in the crypto bull? And Matt Damon has been the face of that for his commercial. Should there be accountability? Should there be more warnings in this industry?
GARY VAYNERCHUK: A, I think this go get the celebrities thing that the mainstream media is attracted to in this moment is very lazy because they were writing those same articles as well. I think celebrities are easy to pick on given their status. And I also think that's understandable. With great power, comes great responsibility. I do think there should be.
I've been incredibly at the forefront of this movement. The reason I'm not getting murdered is because I was overly aggressively on quotes like that consistently. I think for celebrities, they have to be careful what they endorse, what they support. But I think it's ludicrous for people to blame them on the price.
Why are we not blaming CNBC and Yahoo Finance's and everybody else for stock prices being down? Celebrities did not invade Ukraine. And you know, inflation was not celebrities. And so the correction of the global economy has also been a direct impact on the crypto economy. And so we have to be thoughtful when we point fingers.
- But you just said the magic word, which is inflation. And crypto was supposed to be a hedge against it.
GARY VAYNERCHUK: It didn't happen because the group of people that were to hedge against that were the original OGs, and they were right. The problem is the masses are now in it. And so the people that own Bitcoin and Ethereum and VeeFriends and World of Women are buying it the same way they think about real estate and Wall Street. And when things go down and they're playing with money they can't afford to lose, they panic and they sell, and that's why markets go down.
- What do you make of the moment that NFTs have collapsed? Meanwhile, people are paying $143 million for a Mercedes, $195 million for Andy Warhol, a $922 million art collection just sold last week at Sotheby's, and they did $2 and 1/2 billion in the last three weeks. Collectibles you can feel, touch, hang on you wall and drive are bulletproof.
GARY VAYNERCHUK: They're not bulletproof. They are having a good moment. You know what else is having a good moment? NFTs. Yes, the NFT market is down. More people bought NFTs this week than the entire month a year ago. We're coming from a stratosphere number of complete ridiculousness.
Yesterday, many, hundreds, thousands of NFTs were sold for hundreds of thousands of dollars. Millions of dollars, yesterday. This is cliche social media, mainstream media all reflection of human beings. Human beings get excited about very basic headlines with very little data below them.
Listen, you've lived this life, you've been in a lot of places through your career. Everybody reads one headline, NFTs are down. Yes, they're down from completely non-sustainable gold rush numbers of January. They're also so up from a year ago today it's not even close. And so this is what always happens. I was there when everybody wrote articles and said the internet was a fad, when March 2000 happened and everything collapsed. News alert, Yahoo, the internet wasn't a fad. And if teens will not be a fad, and I will be historically correct about that.
- Let's get to the positive, which is your NFT, that's how you get in here.
GARY VAYNERCHUK: That was the positive.
- From my perspective.
GARY VAYNERCHUK: Look, I want everyone to hear this. That was the positive. When markets get out of hysteria and correct, that's when the good stuff starts. You get rid of the individuals who are there for-- this is in real estate, this is in sports card collecting, this is in Wall Street, this is everywhere. Once you get the people in that actually believe in get rich quick [BLEEP] gets good.
I don't know if you have to beep that on Yahoo, but please beep it. It gets good. And so I think this is the good part. I'm happy. I've been anxious for the last 15 months, which is why I've made so much of that content. I'm like, can we just get past the part where everyone thinks they're going to be a millionaire in an hour? And I'm really happy we're in this spot.
- Gary V, the CEO of VaynerMedia and Vayner Sports and the founder of VeeFriends just to mention a few. As brilliant as he is passionate, I have to separate the NFTs from the crypto space. I've said I think Bitcoin and Ethereum have something to them. The NFT space there is this passionate tribal aspect to it that I think is hurting them in mainstream.
But if you get in VeeCon, you have to have an NFT. That's the ticket. And I think that's the most practical application down the road, sports tickets, concert tickets, things that Main Street versus Wall Street can relate to. But it is a fascinating space.
- It is fascinating. And I get what he was saying when he was trying to compare it to when we first saw the credit card back in the beginning of the '70s and also the dotcom bubble, just so much speculation out there. Obviously, we did see a lot of correction when it comes to the dotcom bubble. But there's still this disconnect, and people are still paying so, so much for these NFTs.
We cover this almost on a daily basis, and I still have yet to fully wrap my head around it. So Rachelle, I think that there certainly is still-- we've come crashing back to Earth a little bit when it comes to NFTs, but when people are still paying 5, 10, $15 million for an NFT and something that a lot of people that are probably buying them don't fully understand, I think we have a little bit more to go until we actually should be where we are supposed to be in this space.
RACHELLE AKUFFO: I mean, but I think he raised a good point about the timeline that you view it through. Because think about how we're talking about Bitcoin and separating that out from NFTs. When Bitcoin first came out, we were saying the same thing. We were literally saying, this is nonsense, this is tied to nothing.
But once the institutional investors got on board, you know, obviously people started changing their tune. And so it could be that it's a timeline thing. Maybe we're not far enough into it to really see this industry mature. But you do find a lot more skepticism with NFTs. You never know.
I mean like you were saying, digital purchases was something that we never thought of before. So digital virtual purchases, that could be the next step. But in order to really see how many years it's going to take to pay off, that's a very long investment. If you have the patience. Maybe that's for you.
- Yeah, we've got to pull emotion out of it. And one quick thing on that "New York Times" report that was critical of those celebrities. Gary said it was lazy than media. But at the same time, he has warned all along of this crash. The celebrities there, Huda Kattan who has 50 million Instagram followers, she warns people. Logan Paul who I spoke with, he has warned people. So not all of the celebrities have stayed away from warning people of the downside.
- Yeah, I think bottom line is, if you're buying, if you're investing in NFTs, you've got to be ready to risk it all and be prepared to lose everything, especially in the market that's so volatile like this.