On OpenSea, the leading website for trading NFTs, Scott Adams is offering one of his comic strips. He has two on there that he made only for the sake of having fun. They’re both the same, and one of them drops an F-bomb. Dogbert informs Dilbert that he just purchased some collectible digital art (NFTs are essentially this in a nutshell), and Dilbert thinks he’s crazy. Dogbert informs him that he just sold it for $120,000. Someone offered $5,000 on the clean edition. On Saturday, the other edition sold for $13,300.
According to a survey by NonFungible.com, the NFT industry has tripled to a little more than $250 million in 2020. The number of wallets used to purchase and sell these products has almost doubled.
Someone with the online handle “Flying Falcon” bought an NFT in the game Axie Infinity earlier this year, which was worth about $1.5 million at the time and was paying in ether crypto. The seller tweeted that it was “the biggest digital land selling ever registered on the blockchain.”
Traditional investors dismissing NFTs are “fooling themselves” if they think they are a passing fad, according to Nigel Green, CEO and creator of London-based financial advisor deVere Group.
Traditional businesses and brands are entering the NFT business, including the Golden State Warriors of the National Basketball Association and Sotheby’s, an old-school art auction house. Two weeks ago, they organized a three-day sale of NFTs produced by an unknown designer.
Christie’s sold “Everyday — The First 5000 Days,” a digital artwork in JPEG form by Beeple, for $69.3 million, making it the third most costly artwork ever sold by a live artist.
“Investing in the art world is unusual in that art is difficult to quantify in terms of money. “The same investor concept has been transferred to digital artworks, and several of these artworks have been sold for hundreds of thousands of dollars, if not millions of dollars,” says Joel F. Kuck, CEO of Famous Token, an NFT platform created by well-known artists with their own gallery in the Vegas Arts Village on Decentraland, another of these Caprica-esque virtual worlds, for those familiar with the Battlestuff series. Famous Token collaborates with Johannes Schwarzburg, an art consultant, and, of course, they have a token (TFT) that can be found on Uniswap and Binance Smart Chain.
“If an investor wishes to start an art collection, he should purchase an NFT from where he wants to start his own gallery,” Kuck says on why you should buy NFTs in the first place. “If he wishes to make money in the industry, he must first learn about it, then recognize and observe which musicians would be hyped over time, then watch for signs such as an uptrend on the secondary market.” That seems to be too complicated. However, there is a demand for Pepe the Frog memes on the NFT.
Not just art pieces and memes are being digitized, but other collectibles are as well. “In his first-ever autograph, Tiger Woods, the golf legend, has a lot of meaning. Someone is the proud owner of the autograph. “However, when the same autograph is sold as an NFT, you possess a piece of the “First-Ever Autograph” that has been digitally signed or authorized by the owner,” says Ganesh Lore, the creator of Werewolf in London, a decentralized finance-based app and exchange that also sells NFTs. “Consider all the golf fans that are enthusiasts who would love to own a slice of Tiger Woods’ autograph. “That NFT will have a lot of value,” he says.
“We could be facing a time of hysteria, but these NFTs might turn out to be much more revolutionary than we expected,” says Rakib Ahamed, CEO of NFTmall, a crypto start-up born out of the NFT craze.
NFTs have investors scratching their heads who have never seen a genuine interest in paintings or other collectibles. Bitcoin has risen from a low of under $5,000 in March 2020 to a high of $50,000 late last year. Many long-term Bitcoin holders are predicting a price above $100,000 for the cryptocurrency. NFTs are another way to diversify into digital assets and are part of the crypto trading world.
“Buying and selling NFTs until they skyrocket in value might be a smart idea,” says Ahamed. “They’ll benefit from the same deflationary values as Bitcoin would. There are only a certain amount of tokens accessible, and the object is one-of-a-kind and cannot be duplicated.”
In the end, the worth of an NFT is determined by how well it is received by others who wish to buy it. If an object is in high demand, its value would naturally rise through the bidding phase, much as it would if a Picasso in a gold-leaf frame was up for sale at Sotheby’s.
Speculation and other considerations such as utility, ownership history, liquidity premium, and potential value speculation both influence the price of an NFT.
“When buying high-priced NFTs, you should be careful and consider it a high-risk investment,” says Ahamed.
NFTs are the next thing after “alt-coins,” which have been expanding with Bitcoin over the past 12 months, according to DeVere Group, which is home to the old dull stocks and bond trader.
Green warns, “This business is really new.” “Those who reject NFTs, though, should reconsider,” he says. Any of these could see realized returns, similar to what early investors saw in “Amazon and Bitcoin,” according to Green.
