Every cryptocurrency bull cycle there is an area that is literally exploding. 2013, Was the first year altcoins like Litecoin, Dogecoin, and Namecoin were taking market share. 2017, was the year of the ICO boom. And now, in 2021, NFT art is taking over the crypto scene.
What is everybody so hyped about?
First, let’s dive a little into NFT and its history.
What Is An NFT?
NFT stands for non-fungible-token.
That’s not very helpful is it?
Well, ”Non-fungible” means that it’s unique and can’t be replaced with something else.
For example, a dollar bill is fungible — trade one dollar bill for another, and you will have the same thing.
On the other hand, a one-of-a-kind baseball card is non-fungible. If you trade it for another card, it’s something completely different with a different value.
And as it says in the name “token”, it’s all on the blockchain so it’s publicly traceable.
Does that clear it up?
If you’re still not sure what it means, have a look at this beginner guide about NFTs.
A Little History on NFTs
In 2016, a project called Counterparty (which I invested in), teamed up with popular trading card game, Force of Will, to launch their cards on the Counterparty platform. Each card was an NFT and tradable.
That was my first introduction to NFTs.
Later on counterparty, a new NFT collectible was released: Rare Pepe Memes. You might have seen them back in the days, without realizing it was an NFT.
The most famous use case of NFTs was the CryptoKitties. They were virtual kitties on the blockchain, and a few got sold for over a $100,000 which hit the mainstream news channels worldwide.
The last one I’ll need to mention is CryptoPunks. These characters have only 1 of each, and all the 10,000 NFTs were given away for free and are still traded on the secondary market today.
As you can see, people are willing to pay over $1 Million for a digital collectable…..
Now let’s fast-forward to today.
NFT Art Is HOT
Let me start with a little FOMO story to grab your attention.
I’ve been following the artist Beeple for a while and got excited when I found out he was NFT’ing some of his artwork.
I was looking at his “Bull-Run” NFT art piece for a week, which was priced a little under $8,000 at the time. There are 271 editions of the same piece, and I was trying to figure out how to value one edition. After a week, I still couldn’t figure it out, but as I see the space growing I figured, a purchase like this is a gamble, but I can see it go up in value, so why not?
I decided to take a nap before I buy it, to make sure I’m rested before I make a gambly decision on it.
You snooze, you lose!
During my nap, Mark Cuban tweeted about Beeple and the value of his artwork exploded! I rushed to my laptop, only to see the cheapest edition of the Bull Run offered for $100,000. Ouch, the most expensive nap of my life.
Today, the last sold edition of the Bull run was sold for $135,000 on Nifty.
Cool story right?
Recently, one single piece of artwork by Beeple got sold for $6.6 Million.
Even though I missed out on a 12x during naptime, it made me realize the NFT art space is a train I cannot miss.
Buying NFT Art
After the Beeple story, I decided it’s time to start collecting some art. The first piece I bought is by Trevor Jones.
He did an open auction for 7 minutes for his piece called “The Bitcoin Angel”, where anyone could buy the same edition for the same price of $777. I missed out on the auction but purchased mine on a secondary market for $969. A bit more than the original price, but if this space is headed in the direction that I think it is, it’s not a big deal.
So what do you think? Will this be worth $100,000 one day?
The cool thing about this piece is, that when Bitcoin hits the price of $77,777 everyone who owns an open edition Bitcoin Angel in their wallet will be entered into a draw to have a portrait drawn of them or a loved one by the artist himself (1/1 NFT included).
A total of 4,157 pieces of this edition were sold in 7 minutes, totalling the artist a little over $3 Million. Currently the last price the piece has been sold for is $2,400, so I’m already in profit on my piece. And I’ve received bids up to $1,800 without putting it up for sale.
I got my piece on Nifty Gateway, a platform which was acquired by Gemini in June 2019, the company founded by Winkelvoss twins.
Here’s a list of platforms where you can buy NFT art:
When an artist comes with a new edition, it’s called a “drop”. So whenever you see an announcement of a new drop. Be ready!
However, if you miss the drop, no worries. You can purchase the art on the secondary market as I did with “The Bitcoin Angel”.
Crypto Art Data
To put the NFT scene in perspective, here’s a cool image:
According to CryptoArt.io:
Total Crypto Art Value: $241,541,391 (129,212.815 ETH)
Total Artworks Sold: 111,409
And as you can see with the naked eye, the crypto art scene is exploding since January 2021.
In my opinion, we’re still very early in this game. So it’s time to start flipping some art.
As an investor, I’m always looking to diversify my portfolio. Last week I shared my experience of my winning crypto trading bot. And today we’re talking about digital art.
Even though these are completely different strategies, with both I keep in mind the short-term gains and long-term vision.
Art is a different world, one that I don’t completely understand yet. In today’s hype, I might be able to flip the art pieces for profit in the short-term. But if that doesn’t happen, I’m ready to hold on to them in the long-term as well.
As always, don’t invest what you can’t lose. And #nofinancialadvice.
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