Are NFTs Really Worth The Fuss?
Today we’re exploring the slightly confusing world of NFTs which are all the rage right now. After that, we’ll give you an overview of what looks to be a very busy week in the markets. Let’s go!
An in-demand non-fungible token (NFT) has been accidentally sold for a little more than $3,000 (£2,270) — one-hundredth of its market price.
What on earth is a NFT?
NFT stands for non-fungible token. Clear? Nope. We hear you.
So, “Non-fungible” is used to describe something that’s unique and can’t be replaced with something else. That’s in stark contrast to something like Bitcoin. Trade one BTC for another and you have exactly the same thing.
So what’s the point?
Many NFTs are part of the Ethereum blockchain, yet they operate very differently from ETH. NFTs can (literally) be anything that can be digitised — drawings, pieces of music, etc.
If you’ve had your ear to the ground recently, you’ll probably know that there’s a big buzz around using the tech to sell digital art. And by “sell”, we really mean sell. Recently, someone paid $6.6 million for a video by Beeple. Craaaaaazy.
Is this the next big thing or just a fad?
One thing about trading is that you never stop looking for opportunities. Whether you’re a newbie or a seasoned trader with thousands of trades under your belt, you’re likely looking for the next big thing. Is this it? Let’s see what the pros say…
Nadya Ivanova, COO of L’Atelier BNP Paribas, has said that the benefit of NFTs is also their greatest weakness, that anyone on the internet can create an NFT out of literally anything, stating that there are a lot of “really bad” tokens out there.
Illiquidity is also a concern. However, Andrew Steinwold, a crypto investor who started an NFT investment fund in September 2019, has said that if people don’t have the option to panic and offload their NFTs, the market could avoid the kind of plummeting values that would spark such selloffs in the first place.
On the plus side, NFTs can be used to fractionalize ownership of physical assets. The blockchain technology behind NFTs is very safe and not something that’s new or untested. Lastly, NFTs can provide diversification benefits to an investment portfolio.
There is a general feeling of caution around NFTs with many experts warning buyers to be aware of volatility, illiquidity, and fraud as the market tries to find its feet. Remember ICOs? Yes we do too. The jury’s out.
Are you collecting NFTs?
Do you buy NFTs? Have you already set up shop in the metaverse? We’d love to know, tweet us your thoughts at @_Contentworks!
Top trading events this week
There’s a fair bit going on this week, here’s when and where you need to tune in week commencing 14.02.22
No specific events are planned.
● JPY — GDP Growth Annualized Prel (Q4)
● GBP — Employment Change (NOV); Unemployment Rate (DEC)
● CNY — Inflation Rate YoY (JAN)
● GBP — Core Inflation Rate YoY (JAN); Inflation Rate YoY (JAN)
● CAD — Core Inflation Rate YoY (JAN); Inflation Rate YoY (JAN)
● USD — Retail Sales MoM (JAN); FOMC Minutes
● AUD — Employment Change (JAN); Unemployment Rate (JAN)
● JPY — Inflation Rate YoY (JAN)
Here at Contentworks we closely follow market movements and prep content that we think your traders would love to read. Let’s get you started right here.
The Contentworks team