Thanks to celebrities like Eminem, Paris Hilton, and Steve Aoki, non-fungible tokens (NFTs) have risen in popularity in the crypto world. Mark Cuban even has a record $502,600,000 NFT portfolio. So, what is crypto art, and is it a good investment for more traditional art investors?
What are NFTs (Non-fungible tokens)?
Non-fungible tokens (NFTs) are unique forms of digital cryptocurrency that are stored in a blockchain and cannot be reproduced. NFTs can be anything, from digital music to images, text, and even a flower (yes, I said flower that is worth $20,000). While every celebrity has NFTs, the real discussion among collectors is centering on digital fine art.
What is the Point of Buying NFT Art?
Owning NFTs (meaning you own unique digital assets) works the same way as tangible artwork. They also support the digital marketplace and can be bought and sold directly.
NFTs, however, are not for every investor. Here are a few pros and cons to think about.
A Few Pros include:
- NFTs are Part of a Thriving Digital Marketplace
- Crypto Art is a Great Way to Diversify Your Investment Portfolio
- As they are Blockchain, NFT Authentication Is Easier to Achieve
- Personal Property Appraisals Work the Same Way with NFTs
- Digital art Improves the Supply Chain
- NFTs can be Easily Fractionalized, Unlike Some Physical Assets
- Blockchain is Safe, So Digital Art Cannot Be Hacked or Changed
- Unlike digital Art Easy to Replicate, NFTs Uniqueness Boost Values
A Few Cons Include:
- Crypto is Unpredictable as the NFT Market Is Modest But Growing
- Crypto Art Does Not Pay Dividends, So It Isn’t Right for Every Investor
- While Blockchain is Safe, NFTs Can Be Reproduced Fraudulently
- Experts Warn That Cryptocurrencies Elevate High Levels of Carbon Emissions
- Digital NFT Files May Be More Difficult Than Other Assets to Liquidate
Does Crypto Art Have Value?
There is great value in crypto art. In 2021, the market surpassed $41 million and is expected to expand as more investors enter the market. The best thing about crypto art is that you can buy it rather affordably. It is the digital files that are considered fine art and celebrity-associated that can reach record-high prices. As a rule, ask for a personal property appraisal before buying.
Digital NFTs can also be a personal hobby or used as a business asset for marketing purposes. A business may also delve into the production of unique or interesting NFTs as a revenue source. There are a lot of possibilities in NFT, and as the market expands, interest will increase and add to what is available, which can be incredibly invaluable to the right digital art buyers and sellers.
As an example, a traditional fine art collector owns the original assets but may choose to create a digital image of a piece of artwork to turn into NFTs. You can create the NFT for yourself to increase your investment portfolio or choose to sell the digital file to another. Some fine art digital files sold for millions, including The Merge, which 28,983 bought for $91.8 million.
How Can I Invest in NFT?
You can invest in NFTs or purchase crypto art in several ways. Most NFT marketplace actors are hosted on Ethereum’s platform as well as crypto exchange sites. You can join a crypto site such as OpenSea, Axie Marketplace, NBA, Larva Labs, and a few other spots to find popular NFTs.
The most important advice is to take your time and research each site if you are new to crypto.
You can also turn your traditional collection into NFTs as additional digital revenue resources.
To learn more about NFT and personal property appraisals, call 617-948-2577 or visit us on Facebook at https://www.facebook.com/ManziAppraisers/ to learn about all appraisal services.