NFT – The investing megatrend of the next decade

Non-fungible tokens, or NFTs, will become a fundamental part of the tech investment megatrend over the next decade.

This is despite declines of around 80% in the last few days in the NFT market, compared to a peak of $ 102 million in one-day NFT trades in early May.

NFTs are digital collectibles encoded on a blockchain that create a unique digital watermark indicating digital ownership and rights to that collectible.

Over the past few months, a number of leading fashion brands, global sports franchises, and renowned artists and musicians have launched NFTS.

In April, auction house Christie’s sold “Everydays” the First 5,000 Days “, a digital JPEG artwork by an artist known as Beeple, for $ 69.3 million – the third most expensive work ever sold by a living artist.

The short-term decline in NFT trades in recent weeks is not at all surprising. This market is still incredibly new, and something that the majority of investors still don’t or don’t even know about.

Nevertheless, technology will inevitably be the investment megatrend of the decade. And I think DFTs will become an essential part of that.

There are four main reasons for this.

First, our daily life is more and more technologically driven, and it is accelerating all the time.

Second, demographics. With so-called “digital natives” growing up under the influence of the internet and other technologies, demand will inevitably increase for technology-driven products such as digital investments.

Third, interest in and investment in cryptocurrencies is steadily increasing – this is how NFTs are bought.

Fourth, NFTs are positively changing business models, especially in the creative industries, which are growing in economic, cultural and social importance across Asia.

For example, artists and musicians can provide enhanced virtual experiences for collectors and buyers, they can show that their works are not counterfeit, and they can include criteria for obtaining royalties whenever their works are resold. in the future.

Of course, the NFT market is not without skeptics.

A number of traditionalist commentators have dismissed NFT as a fad. Still, I would say these people would probably have dismissed the internet in the 90s and e-commerce giants such as Amazon as pure hype in the 2000s.

The main factor at play is that millennials, especially Gen Z, are leading digital lives and it’s a natural progression to want to bring digital representations of luxury brands, music and art to these worlds. And that has value.

That said, although the dominance of NFTs continues to grow over the next decade, the market is still very new and highly speculative.

The risks are therefore high and investors must be extremely careful.

Photo: The Focal Project

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