Fall of NFTs: Investors are forced to trade their digital objects for tax gains
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The crypto market bear market is also affecting the NFT sector. A report by Chainalysis even showed that the average price of this type of digital asset has fallen by 92% during this year. Faced with this situation, investors who have spent crazy sums to acquire these digital objects are thinking of using them to benefit from tax deductions.
A dramatic year for NFTs
This year, there is not a sector of the crypto universe that has not experienced the effect of the general decline. Be it the metaverse, DeFi (decentralized finance), decentralized applications or NFTs; the bear market has had an impact on the value of their projects. Some thought, however, that the digital objects sector was not going to be affected because of its popularity with public figures (artists, sportsmen, politicians and businessmen).
Reality will prove otherwise. NFTs are among the asset class most affected by the downside backdrop. A report by Chainalysis indicated that the average value of an NFT fell from $3,894 to $293 between January and July, a drop of 92.47%. For example, the BAYC purchased for $1.3 million by Justin Bieber is currently only worth $71,000.
It’s not just the prices of these digital goods that have fallen, the sales data is also dramatic. According to tracker CryptoSlam, NFT-related trading volume is down 97% from its January 2022 highs.
Given this situation, many investors are forced to trade their collectibles to obtain tax deductions. According to what The Guardian reported, there is even a company that offers this tax service.
Unsellable: The savior of investors
Dubbed “Unsellable” or invendable in French, the site, launched a month ago, says it is building the largest collection of worthless NFTs in the world. Concretely, he buys NFTs at particularly reduced prices, generally at the floor price, and then provides a receipt to the seller for tax purposes.
According to data provided by Skyler Hallgren, the founder of Unsellable to the British newspaper, his company has already collected 5,000 NFTs. The latter predicts that by the end of this year, the site will have no less than 15,000 digital objects.
“We realized there was a practical problem that was tying up a lot of resources and that we could create a lot of value for people by offering them to buy back their worthless NFTs and allowing them to reap the losses”
Hallgren dropped at The Guardian.
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