Got ‘Worthless’ NFTs? This Startup Buys JPEGs for a Penny to Harvest Tax Losses
The post Got ‘Worthless’ NFTs? This Startup Buys JPEGs for a Penny to Harvest Tax Losses appeared on BitcoinEthereumNews.com.
For the overwhelming majority of NFTs, the brutal bear market of the last two years wasn’t just a phase: Some 90-95% of NFT collections will never return to pre-bear market valuations, DappRadar Head of Research Pedro Herrera recently told Decrypt. For many NFT owners, then, the question of what to do with millions of now “worthless” JPEGs is looming large. One potential solution: embracing those losses head-on, and using them to save on taxes. Unsellable, a startup founded last year that buys illiquid NFTs off weary holders at a penny apiece in order to allow those owners to take tax write-offs, claims that it has already helped customers declare a combined $4.2 million worth of realized losses. Skyler Hallgren, Unsellable’s co-founder, thinks that sum is just the tip of the iceberg for a sector that’s collapsed by well over 90% in trading volume and activity since barely two years ago. “There’s this massive amount—potentially a billion dollars—in locked up, unrealized losses downstream from the NFT bubble of 2021,” Hallgren told Decrypt. “We can actually do something about that.” Unsellable claims that its average user has been able to write off $4,200 worth of losses on NFTs that have lost substantial value. Last year, one user of the platform—Platform Engineer Thomas Mancini of NFT portfolio app Floor—said that he wrote off nearly $58,000 in NFT losses with Unsellable’s help. A handful of “blue chip” NFT collections like Bored Ape Yacht Club, CryptoPunks, and Pudgy Penguins have retained value during the ongoing crypto winter; Unsellable doesn’t touch those. Instead, it curates a sort of graveyard for broken NFT toys: rug pulled projects, abandoned collections, and coattail-riding copycats (think: Jacked Ape Club, Wealthy Ape Social Club, IRL Punks, BoobBirds—plus wild cards like My Banana Fucko.) All in all, the company has collected about…
Filed under: News - @ December 30, 2023 1:34 pm