How Nft Trends are Changing the World of Investments

The exponential expansion of non-fungible tokens (NFTs) in 2021 was due to a variety of factors, one of which was the unpredictability and universality of new technology adoption.

While Ethereum’s rise in value may sound like great news to investors who believe that the value of NFTs will increase in the long term, NFTs carry a high level of inherent risk.

But what are NFTs, again?

To assess the real impact of NFTs on investments as well as the future of investments, we need to understand what NFTs are. They are non-fungible tokens, many would repeat with a long sigh of frustration, forgetting at the same time, by clicking on another original image on a peer-to-peer platform, that they are more than just JPEGs.

NFTs are crypto assets that represent a digital item like an image, video, or even land in a virtual universe, but the focus here is on “representing.” NFTs, as blockchain tokens, only certify that you are the sole owner of whatever one-of-a-kind digital thing.

The future of investing with NFT in pictures

NFTs offer new ownership opportunities and remix old ones, but they could be heading for a “bubble”. Their marketing is reserved for a few confident and courageous people. This means that unless the NFT market becomes more accessible to the general public, it will not gain widespread adoption, which will limit its promised potential.

The real value of NFTs lies in the smart contracts on the blockchain technology that powers them. This is why it is important to have an overview, because even if the demand for NFTs decreases in the future, they could still remain at least in the near future. The frequency of use may decrease, but the more general applications of NFTs, due to the smart contracts that drive them, will continue to be compelling.

Even so, the average or individual investor should stay away from NFTs for now, unless they only want to invest in them for the artwork and don’t care about losing their money. I recommend doing it risk-free by only investing what you’re willing to lose, or avoiding it altogether if it interferes with other financial goals.

In short, whether it’s ten dollars or a hundred, don’t put money into NFTs that you can’t afford to lose. Cryptocurrency is yet another matter; it can occupy up to 5% of investors’ portfolio in the current scenario, but this will not change the position of NFTs.

The investment world is opening up like a fruit right now, it has all the freshness and flavor of a post-pandemic boom. NFTs may play an alluring role there now, but it remains to be seen how relevant they will continue to be in the future.

Author Andesh Bhatti is an angel investor facilitating and enabling the future of a tech-driven world. The opinions expressed are personal.


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