NFT Fever Continues
Happy Monday!
I wanted to touch once again on the wide wonderful world of NFTs. I first wrote about NFTs in a detailed blog post in early March – where I highlighted why these unique digital “ownership” tokens could have a massive impact on the ecosystem. Then again in late March, I wrote about how the NFT space was entering the mainstream at a torrid pace (with a catchy feature on SNL).
It’s time to come back and see whether any of these predictions panned out, are NFTs still undergoing a Cambrian explosion of innovation? Or is the fad losing steam? Read on.
If you’ve checked the Ethereum burn tracker since my article last week, you might have noticed the “Burn Leaderboard” on the right of the dashboard. These are the top fee-earning applications on the entire Ethereum network. At the top of this list is OpenSea – what is OpenSea? Well, it’s the #1 NFT art marketplace on the web, and it is regularly doing tens of millions of dollars in volume every day. (By the way, since last week’s article over 40,000 more ETH have been burned – the equivalent of >$120 million).
That’s right, people are creating, buying, and selling JPEG images for thousands of dollars, every minute of every day. Here’s an image of a cute penguin that sold just yesterday for 3.49 ETH (roughly $11,000).
From the “Pudgy Penguins” collection (Penguin #21)
Here’s an image of a pixelated “punk” in a McDonalds hat that sold a few days ago for 4.85 ETH (roughly $15,000).
From the “Fast Food Punks” collection (Punk #864)
What the heck is going on here? Is it all just an elaborate scheme to launder money (as some pundits have suggested)? By and large, I don’t think so – I think what is happening is we are seeing a new class of digital art pieces with verifiable ownership getting adopted in a big way.
The charge is being led by young people and the newly crypto-rich. Young people who are digitally native and likely spend most of their time online already understand the value of digitally ownable assets, as well as digitally ownable art. The strength of the NFT market shows that loud and clear.
Some of the biggest beneficiaries are artists themselves. Platforms like OpenSea (and many others) created a thriving global marketplace for NFT artwork. Artists can create NFTs for their unique digital artworks and sell their work to a wide audience. What’s more, thanks to the fact that all NFT sales and resales involve transparent and verifiable crypto transactions, artists can earn commissions from resales of their artwork on the thriving secondary market – kind of like a built-in royalty collection!
A good friend of mine recently participated in an NFT project called SupDucks. As a developer, he worked with the artist to write code for the “drop” event (where the NFT is released to the public and can be sold in the “primary” sale phase). For his effort, he received a split of the sales revenue earned by the artist, as well as a split for all secondary market sales. To date, SupDucks NFTs (a collection of 10,000 unique ducks) has traded over 3,500 Ether (>$1 million!) in volume since their release around a month ago. That becomes a significant income stream. You can check out the SupDucks collection here, and see if you can find a duck that tickles your fancy (it’s hard to look at them without smiling!).
For my part, I remain just as excited (or even more so) about what’s to come for NFTs as I was back in March, and maybe even more so. The digital metaverse is being built right in front of us, and it will create a new paradigm for art, gaming, online identity, and so much more. In some ways, it already has.
Thoughts on the Market:
Bitcoin and Ethereum both continued their rally this past week, after having cleared the important resistance zones I pointed out in the last analyses. Hopefully, investors took my advice and continued to DCA (dollar cost average) at the lower levels. I still think you should continue to follow your DCA plan. It’s quite possible the bull market will heat up once again in the coming months. I still believe 6-figure Bitcoin/5-figure ETH is on the table for this year/next year. Though like I always say, I don’t have a crystal ball!
Crypto News:
Venmo is letting its credit cardholders convert cash-back to crypto for free (LEARN MORE)
AMC says it will accept bitcoin as payment for movie tickets by year-end (LEARN MORE)
Senate Advances Infrastructure Bill Without Amending Crypto Provision (LEARN MORE)
Coinbase Rakes In $1.9B in Transaction Revenue in Q2, Beating Estimates (LEARN MORE)
Road to Babylon Services:
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Have a great week!
Shahar
This newsletter is meant for informational purposes only. It is not meant to serve as financial advice. If you are interested in financial advice, please schedule a personal consultation with me, and be sure to read the accompanying disclaimer.
