Identifying the opportunities in NFT
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When Mark Cuban the billionaire tech visionary was asked recently what was going to be the next big thing, he quickly singled out blockchain and NFTs.
‘This is like the early days over again. I think NFTs and blockchain is going to be huge.’
No doubt you have been reading a lot about NFTs recently. Probably ever since these things called CryptoKitties started changing hands for thousands of dollars. In case you are not exactly sure what NFTs are, let us explain.
NFTs are short for Non Fungible Tokens. NFTs are cryptocurrency tokens used to represent assets (like digital art, music, or movies). They can be bought and sold like physical assets whilst their ownership is tracked on the blockchain. Unlike bitcoin, for example, each token is unique and represents a specific asset.
It all started back in 2012 with something called Colored Coins, however, it wasn’t until the launch of CryptoKitties in 2017 when NFT became mainstream. CryptoKitties is a blockchain-based virtual game that allows players to adopt, raise and trade virtual cats. Some have sold for a whopping $100k.
There are over 100 NFT Projects and many more in the works. The market is growing fast. Faster than DeFi (Decentralized Finance), and that is saying something! In January 2021 alone, the market grew by 10 times. Although we alluded to the fact that NFTs have gone mainstream, this relates more to its recent mainstream publicity with the likes of Christie’s entering the market selling digital art. The good news is it is still early days. It is estimated that the secondary market in NFTs is in the region of $2–3m a month, which leaves massive room for growth. We are truly at the beginning of the cycle.
For the investor, this is the perfect time to enter the market. There are already some well-established players, thus reducing the risk of investing in a market that is still finding its feet and where cryptocurrency prices are relatively sensible. According to CoinMarketCap.com, there are 65 listed NFT cryptocurrencies. That is a lot of choices. What we have attempted to do here is select a range of projects that are worth further consideration. These are by no means recommendations, and you should always do your own research, but this is a great starting point for any investor wanting exposure to this rapidly growing space.
Every Friday, CryptoQuestion provides a list of micro-cap cryptocurrencies that deserve closer attention. We also highlight promising ICOs and NFTs. View our latest list here.