Has NFTs trend been cooling off? Traditionalist investors who dismiss NFTs – the new digital asset class taking the art, fashion, music and sports world by storm – are “fooling themselves if they believe they are a passing fad.”
This is the bold – and some might say controversial – observation from Nigel Green, the CEO and founder of deVere Group, one of the world’s largest independent financial advisory and fintech organisations.
What is NFTs?
NFTs are one-off digital assets that are verified through blockchain technology, giving buyers certificates of authenticity and ownership. They produce unique, non-interchangeable digital tokens, and can be bought and sold like any other assets but they do not have a physical form.
NFTs trend is exceptionally growing
The latter, the traditional auction house, held a three-day auction of NFTs by an anonymous artist two weeks ago. Meanwhile, Christie’s last month sold “Everydays – The First 5000 Days,” a digital artwork in JPEG form by an artist known as Beeple, for $69.3 million – which is the third most expensive artwork ever sold by a living artist.
The deVere CEO says: “The virtual hype about NFTs is very real and traditionalist investors who dismiss them as a passing fad are fooling themselves.
“They may be a novelty at the moment, but it makes sense that with the blistering pace of the digitalisation of our world, digital assets will become increasingly valuable.
“Demographics are on the side of NFTs too. Millennials, and Gen Z especially, have digital lives and it’s natural to want to take digital representations of luxury brands, music and art into these worlds – and now they can.”
Mr Green also points to the Great Wealth Transfer. “According to some estimates, $68 trillion in wealth is to be passed down from the baby boomers – the wealthiest generation ever – to their children and other heirs over the next couple of decades,” he notes.
Another key reason why NFTs trend are here to stay is that they are “positively changing business models,” especially in the creative industries.
“Artists and musicians for example can provide enhanced virtual experiences for collectors and buyers, they can prove if their works are counterfeited, and they can include criteria to get royalties every time their works are re-sold in the future.”
The messaging also comes with a warning
Mr Green says: “NFTs are the hottest new digital asset – but investors need to exercise extreme caution. This market is still the Wild West in terms of investing. Personally, I would wait until the dust settles.
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