As NFT sales fall 83% year-over-year, Meta has withdrawn the tokens from its plans for the metaverse, alongside cutting a further 10,000 staff in its “year of efficiency”. While companies like Starbucks have launched successful NFT schemes, others have flopped and some observers feel that Web3 branding may be becoming toxic.
- Meta is winding down NFT activity on Facebook and Instagram as part of its “year of efficiency”.
- Companies like Starbucks and Walmart are finding unique success with NFTs.
- Amplify Transformational Data Sharing ETF captures companies involved in applying blockchain technology.
Meta [META] is moving away from non-fungible tokens (NFTs), as it winds down testing of approaches to minting and sharing the tokens on Instagram. Users will also lose the ability to share tokens on Facebook, as the social media giant looks to streamline its business.
Meta’s share price surged 7.25% on 14 March following the news. The stock has gained 64.4% year-to-date, and 15% in the past month alone. The shares fell 64.2% over the course of 2022, however.
The “crypto winter” of last year hurt NFT sales, with data from NonFungible indicating an 83% year-over-year decline in sales volumes of the tokens.
The step away from NFTs undermines Meta’s $10bn annual investment into building the Metaverse, though it also comes at a time when Meta is desperate to improve its cost efficiency, and the Metaverse is still many years away from profitability.
Cuts deepened in efficiency drive
Stephane Kasriel, Meta’s head of commerce and financial technologies, said that the company’s move away from NFTs is a result of “looking closely at what we prioritise to increase our focus”.
In this, NFTs are another victim of Mark Zuckerberg’s “year of efficiency”, which has also led to a further 10,000 job cuts at the company, announced on 14 March.
The news comes just months after 11,000 employees were axed in November, the largest cull in the company’s history. With earnings and revenue squeezed by the economic slowdown—and Apple’s new privacy features on iOS limiting Meta’s ability to track users and tailor ads to them—the social media giant is scrambling to reduce its costs.
Recruitment teams will be the first impacted by the cuts, which began on 15 March. In April, technology teams are expected to be hit, while “business groups” will come under fire in May.
Meta has been stepping away from blockchain technologies since selling its fledgling cryptocurrency Diem to now-defunct Silvergate Bank in January 2022.
NFTs provide Starbucks perks
Meta might have deemed them a distraction, but other companies are piling into NFTs.
In December Starbucks [SBUX] launched Starbucks Odyssey, an extension to its rewards program which allows users to collect NFTs and other perks by buying coffee and completing online challenges.
Customers have sold tokens for up to $1,900 on the secondary market. The program has generated over $200,000 in sales for Starbucks since launching in beta in December, and the latest batch of 2,000 NFTs, released 9 March, sold out for $100 each within minutes.
Meanwhile, hints in a job advert for Pokémon’s prospective “Corporate Development Principal” indicate that Nintendo [7974.T] could be making a move into NFTs for one of its most successful and marketable brands.
Other gaming developers are steering clear. Microsoft [MSFT], for example, banned NFTs from Minecraft last July.
Indeed, Katie Baron, head of retail at trends intelligence firm Stylus, believes that NFTs and other blockchain technologies (and even the word ‘blockchain’ itself) “have become somewhat toxic”.
Not all NFT schemes are as successful as Starbucks’. Porsche’s [P911.F] January NFT launch crashed, with only 25% of the proposed 7,500 tokens sold and the mint cut after just 2,363 tokens were minted.
Funds in focus: Amplify Transformational Data Sharing ETF
Investors seeking to tap into the potential of blockchain technology can select the Amplify Transformational Data Sharing ETF [BLOK].
Appearing on last week’s episode of Opto Sessions, Amplify’s founder and CEO Christian Magoon explained that, rather than being a “crypto” ETF, BLOK’s purpose was to offer exposure to “companies that are actively engaged in blockchain-related business activities” in all their transformative potential.
A good example of this is BLOK’s 0.75% weighting in Walmart [WMT] as of Tuesday. Few would consider the budget retailer to be in the same futuristic world as the Metaverse and NFTs, but Walmart uses the tokens to bring accuracy and transparency to goods within its supply chains, which can be represented and transferred using unique NFTs.
BLOK has gained 23% year-to-date, but is down 44.6% in the past 12 months. Coinbase [COIN] is the fund’s top holding, with 6.06% of assets under management.