coindesk.com
After the boom of 2021, the hype that fueled non-fungible token (NFT) trading has subsided. Cryptocurrency prices have plummeted from their former highs and mainstream interest in digital collectibles has waned, bringing down NFT prices.
But the extended crypto winter has come with a potential silver lining – tax-loss harvesting, where NFT enthusiasts can sell their no longer valuable JPEGs and claim losses to offset their tax bill.
Enter Unsellable, a platform launched last month that acquires “worthless” NFTs for the cost of gas plus a few bucks. The site functions as instant liquidity for otherwise, as the name suggests, unsellable NFTs, providing a quick way for NFT investors to capture their losses.
“Think of us as Web3 junk removal,” it says on the website. At the time of writing, the service has so far purchased over 9,300 NFTs, according to Etherscan.
The most valuable NFT in the Unsellable Collection on OpenSea so far is Army of the Dead #78, a skeleton-themed PFP that sold for over 3.6 wrapped ether (wETH) in January 2022. At the time of sale, when ETH was worth around $3,300, the NFT was valued at about $12,000. Today, as the price of ETH has fallen sharply, that same token is only worth $4,330.
The majority of NFTs purchased by the site are derivative projects – meaning, collections based on other popular projects that are often made worse. These include Lost Nouns, a derivative of Nouns, Anatomy Science Ape Club, a derivative of BAYC and Baby Goblinz, a play on Goblintown.
The platform also allows users to sell their no-longer-wanted NFTs in bulk. One collector sold dozens of NFTs from the GoopGirls collection, along with others, in a single transaction, paying only 0.05 ETH (about $65) plus gas fees.
The platform’s popularity comes as once-profitable traders seek to cut their losses. Prices for most NFTs and cryptocurrencies were at their dollar-value peak last December and January, with NFTs being hit especially hard. The boom in prices for NFTs also coincided with a peak in trading volume, meaning most NFTs purchased at the time were at prices higher than current values.
Read more: How to Benefit From Tax-Loss Harvesting in Crypto