- GameStop shuts down its NFT marketplace.
- Loses hope on NFT regulations, the prime reason why its NFT Marketplace was shut.
- Dwindling profits also contribute to the decision.
- Even MICA does not cover NFTs.
- It took 10 years for Bitcoin ETFs to receive permission.
GameStop, one of the largest gaming retailers, has shut down its NFT marketplace as struggles to find a future for NFTs. The main reason provided by GameStop was that NFTs lacked regulatory clarity.
In blockchain gaming, NFTs have a huge utility in terms of in-game assets and modules(or levels) within the games. Several blockchain companies have already succumbed to crypto winter as of January 2024.
GameStop’s Pulls the Plug on its NFT Marketplace
GameStop has announced that it will shut down its NFT Marketplace just after a 18 months of launch. The marketplace was launched in July 2022 and hosted several collections primarily related to blockchain games.
The news was shared by its website and tells the user that the marketplace won’t be operational as of February 2, 2024.
The gaming retailer has already ended its NFT wallet in September 2023.
This year GameStop’s profits had also dwindled as shown by its quarterly earnings report of Q3, 2023. The ending of their wallet program and then the NFT marketplace might be a profit-loss related decision for the company.
Why GameStop Shut it Down its Marketplace in a Bullish Market?
One of the primary reasons why we believe GameStop pulled the plug was that it would take a long time for NFTs to get regulatory clarity which currently only three cryptocurrencies enjoy, Bitcoin, Ethereum and Ripple.
Even forefront countries where crypto is highly established fail, to provide sufficient regulatory guideline on what NFTs would look like in terms of transfers, taxation, copyrights, etc. Also whether they would get treated as assets or as commodities (as was with Bitcoin).
The current bull market is primarily supporting the growth of large cap cryptocurrencies like Bitcoin, Ethereum, Shiba Inu, Cardano, etc. The NFT markets are still struggling to recover.
Current State of NFT Markets
Lately , NFT markets have shown little recovery after August 2023. However, it still fails to match crypto markets which have made decent 18 month highs.
Though there has been a good shuffling of NFT markets where Blur leads the marketplace competition now and has completely replaced OpenSea. As of January 14, 2023, Blur has a market share of 73.9% by volume as compared to OpenSea’s 19.6%.
However, there is a tough competition from Bitcoin Ordinals.
It is interesting that Bitcoin Ordinals which are similar to NFTs have attracted much greater attention. Till date more than 54 million Ordinals have been inscribed.
Are Bitcoin Ordinals Safe from Regulations?
Though Bitcoin has been declared a commodity in the USA by the CFTC, yet, there appears to be no clarity whether Ordinals which are assets derived from Bitcoin can be termed as securities.
Even the MICA regulations of Europe do no cover NFTs if they have are offered at a fixed price.’
This poses a unique challenge where investors, project owners and NFT artists are worries about their future. Even if an NFT law comes into existence it might take several years of effort before it benefits anyone. We all know that it took more than 10 years for Bitcoin ETFs to come in the markets.
How Current Laws Treat NFTs?
Though there are no laws on NFT regulations, yet multiple countries have placed them under different forms of taxation.
- In UK, NFTs are treated as property and capital gains tax is levied on it.
- In USA, NFTs are treated as assets and treated under Capital Gains.
- In India, NFTs are treated same as other “Virtual Digital Assets” and taxed at 30% flat.
- Japan has the most aggressive tax on NFTs which can go up to 55%.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.