Celebrities and influencers are helping NFT technology break through into mainstream discussion. Experts argue that investing in tokens does not require such strong nerves as tracking the cryptocurrency rate, which in recent weeks - unlike NFT - has experienced another large drop in value. Tokenization of works of art is slowly becoming a standard for many auction houses and an asylum for investors.
Bitcoin and Ether, the two largest cryptocurrencies, have lost almost half of their value (as of the end of January) since reaching record prices last November.
- Of course, for those who invest in crypto in the long term, this is not a shocking situation, and even less does it cause someone to suddenly go bankrupt. Those who live in the world of digital currency are simply used to the fact that even one sentence of Elon Musk, or a decision of some government - especially Chinese - shakes the valuation of cryptocurrencies - says Bartosz Bilicki founder and president of a startup SmartVerumwhich tokenizes art and creates an "artistic" metaverse.
Bilicki adds: - However, it is worth paying attention to other investment opportunities that, although they have a shorter history than cryptocurrencies, seem to be more stable at the moment, such as NFT tokens.
The crypto is falling sharply, the NFT is adjusting its course
According to a study by DappRadar, a data collection and analysis company that tracks the NFT industry, the top 15 NFT collections lost a total of 50% of their value in the same period in which the two most popular cryptocurrencies fell by almost XNUMX%.
- We can therefore speak of a certain revaluation adjustment, not galloping declines which are putting pressure on investors - points out Bilicki.
What is the matter with NFT tokenization, which is gaining new footholds, for example in the art market? In a nutshell, the process is that auction houses can sell paintings or other works of art a bit differently than before. The customer no longer has to buy the rights to the whole, but only to a fraction of the work of a specific artist. Thanks to this, the costs are reduced, and although, for example, a purchased work cannot be permanently placed in your private museum, the investment field is increased. In the future, this fraction of access is likely to be worth more than it was when it was purchased. These are the laws of investing in works of art. As a rule, they "age" dearly. NFT, like cryptocurrencies, use security through blockchain technologies.
The first such sale took place in 2018, and shares in Andy Warhol's work were sold using smart contracts (i.e. using blockchain technology).
The barrier in people's consciousness was broken in stages, but it seems that ultimately it was achieved by selling an entirely digital work. For $ 70 million, a digital collage from an artist nicknamed Beeple found a new buyer. Mike Winkelmann's work took five thousand days to create one (digital) whole as many abstract, fantastic, grotesque or surreal images.
Who will follow Paris Hilton and Gonciarz?
And according to a report by Chainalysis, a blockchain analytics company, from the beginning of last year to mid-December, the NFT market exceeded $ 41 billion. - NFT and cryptocurrencies are often considered related. You need cryptocurrency to buy NFT, and both cryptocurrencies and NFT use blockchain technology to secure. This is our "document" confirming our assets. However, NFTs themselves are not a digital currency as each token is unique and their limited amount helps keep the prices of these digital collections high. It cannot be denied that a lot of noise around NTF is also made by celebrities who help this technology break through to the mainstream - comments Bartosz Bilicki from SmartVerum.
In 2021, celebrities around the world invested in NFT, e.g. Eminem or Paris Hilton, and Justin Bieber bought one of the collector's items for 500 ETH, or about $ 1,3 million, and thus joined the elite club Bored Apes Yacht. In Poland, NFT also does not complain about the lack of popularity, and among those who admit to investing in this technology can be mentioned, for example, Krzysztof Gonciarz, Magda Gessler, Malik Montana and Joanna Jędrzejczyk.
An important aspect for investors, however, is the usefulness of the NFT. In the case of Bored Apes Yacht Club, the purchase of a token is only (although probably for celebrities up to) a ticket to the prestigious group of millionaires, and other tokens give the opportunity to participate in the game or allow you to create your own space in metavers.
- As with other ways of investing, you should always exercise caution. If you are investing in the long term, ask yourself the fundamental question, is the NFT token I am buying today likely to be worthwhile in a few years? In the case of celebrity tokenization, the value may persist as long as the popularity of the "star". However, when it comes to the valuation of famous works of art, it is difficult to predict that the digital version of Van Gogh's "Sunflowers" will become worthless - comments Bartosz Bilicki from SmartVerum.