This was my first article which I wrote last year- it’s always fun to look back!
Take a look at this random drawing:
It looks like some kid made it by accident.
How much would you say it’s worth? $1? Maybe $10?
The Craziness of NFTs
What if I told you that the ‘squiggle’ sold recently for a MIND-BLOWING 2.4 million dollars (~750 Ethereum)?!
With 2 million dollars you can buy mansions and supercars, but this lunatic bought a LINE. This wasn’t even a physical copy either- it literally is a picture that you can own by simply using “Control + C.”
‘Chromie Squiggles’ as they are dubbed, are a collection of 9191 computer-generated squiggles that are each unique (no two squiggles are the same), and each can only officially be owned by a single person.
Why?
Now for the million-dollar question: Why would anyone spend that much money on a JPEG?
Here are some answers:
- The NFT market is growing at an extremely fast rate.
- For example, check out the price action of one of the largest NFT projects, ‘Bored Ape Yacht Club.’ These NFTs of apes were based on the ‘Crypto Punks’ and were initially sold for ~$250, around 4 months ago. The ‘Bored Apes’ are now selling for $200k+ and illustrate the steep growth of the NFT community in the past few months.
- Opensea (an NFT marketplace), has recently passed Etsy in sales volume with more than 2 BILLION USD in sales in August alone
- There have been many new users joining the site and purchasing their first NFT, with 250,000+ traders currently utilizing the platform. I expect this number to increase.
2. NFTs are garnering more attention in the mainstream media
- Paris Hilton was on SNL with Jimmy Fallon and explained the concept of NFTs
- They are consistently featured in the New York Times, Forbes, as well as various other media organizations
3. Further growth will take place as we will see more celebrities starting or endorsing NFT projects, to take advantage of the market.
- For example, Floyd Mayweather recently started ‘Floyd’s World’ which is a collection of NFTs that allows you to be eligible to talk/meet him.
- Mila Kunis and Ashton Kutcher also started an NFT collection, ‘Stoner Cats’.
- Tory Lanez (a rapper) recently sold 1 million copies of his album as NFTs for $1 each. They all sold out in 57 seconds.
Investing
Let’s just be frank, more than 95% of NFT projects will fail. But how do we separate the winners from the losers? I feel that the NFT gaming market especially is a massive opportunity, as the gaming industry generates hundreds of billions of dollars of revenue. For example, Axie Infinity, an Ethereum-based NFT game, recently hit a record of 1.1 billion USD in sales and is the highest-grossing NFT project ever. Additionally, I think we should see computer-generated art become more popular, with artblocks (https://artblocks.io/) at the forefront of it all.
Final Thoughts
The NFT market is a huge potential opportunity. However, it is also quite risky, as, at this point, it is impossible to know with utmost certainty whether NFTs will die or thrive as we are just so early. Regardless, we can still make money off of this short-term boom and I definitely plan on releasing more short, yet informative articles as well as what I am currently doing!
