NFT market will become an integral part of the “tech investment megatrend” of the next decade, affirms the CEO of one of the world’s largest independent financial advisory and fintech organisations.
The comments from Nigel Green, deVere Group chief executive and founder, come despite the drops of about 80% in recent days in the NFT market from a peak of $102 million in NFT transactions in one day at the beginning of May.
NFTs are digital collectibles that are encoded onto a blockchain - the same technology on which cryptocurrencies run - creating a unique digital watermark showing ownership and the digital rights to that collectible.
In recent months many major global sports franchises, fashion brands and household name artists and musicians have launched NFTS.
In April, auction house Christie’s sold “Everydays” the First 5000 Days,” a digital artwork in JPEG form by an artist known as Beeple, for US$69.3 million – making it the third-most-expensive work ever sold by a living artist.
Mr Green notes: “The temporary drop in NFT transactions in the last few weeks is not surprising. It’s still a very new market that many investors still do not understand or even know about.
“However, technology will inevitably be the investment megatrend of the decade and, I believe, that we can expect NFTs to become an integral part of this.”
He says there are four main reasons why this is the case. “First, our daily lives are becoming ever more tech-driven – and this is picking up momentum all the time. Second, it is about demographics. With the younger demographic – who are “digital natives,” having grown up under the ubiquitous influence of the internet and other technologies – who have increasing spending power, there will be increasing demand for tech-orientated products such as digital investments. Third, there’s increasing interest and investment in cryptocurrencies, which is how NFTs are purchased. Fourth, NFTs 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 their works are not counterfeited, and they can include criteria to get royalties every time their works are resold in the future.”
But Mr Green recognises that there are still many NFT sceptics. “Some traditionalist commentators have dismissed NFTs as a fad and/or a bubble about to burst. I would suggest that these would have been the people, including some tech experts, to have also dismissed the internet in the 1990s and the likes of Amazon in the 2000s as ‘hype.’
“The bottom line is that 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 – and this has value.”
However, the deVere CEO concludes with a warning: “NFTs will have growing dominance within the tech investment megatrend of this decade.
“But the market is very young and highly speculative at this stage and, as such, the risks are high. Extreme caution must be exercised".
Hernaldo Turrillo is a writer and author specialised in innovation, AI, DLT, SMEs, trading, investing and new trends in technology and business. He has been working for ztudium group since 2017. He is the editor of openbusinesscouncil.org, tradersdna.com, hedgethink.com, and writes regularly for intelligenthq.com, socialmediacouncil.eu. Hernaldo was born in Spain and finally settled in London, United Kingdom, after a few years of personal growth. Hernaldo finished his Journalism bachelor degree in the University of Seville, Spain, and began working as reporter in the newspaper, Europa Sur, writing about Politics and Society. He also worked as community manager and marketing advisor in Los Barrios, Spain. Innovation, technology, politics and economy are his main interests, with special focus on new trends and ethical projects. He enjoys finding himself getting lost in words, explaining what he understands from the world and helping others. Besides a journalist, he is also a thinker and proactive in digital transformation strategies. Knowledge and ideas have no limits.