NFTs, or non-fungible tokens, have become the latest cryptocurrency phenomenon and investment hype worldwide. Such blockchain-based crypto tokens act as certificates of ownership for virtual or physical assets. As a result, a piece of artwork or collectable item is “tokenized,” so that the digital certificate of ownership can be bought and sold. So far in 2021, the NFT market has become one of the most discussed successes of blockchain technology.
Bitcoin (CCC:BTC-USD), the first cryptocurrency, was created in 2009. Since then, the crypto space has evolved significantly. In addition to Bitcoin, there are now thousands of other crypotocurrencies, called altcoins, on the market. And many of them have experienced record-breaking highs in the past 12 months.
However, BTC-USD and altcoins are fungible. Put another way, one Bitcoin in someone’s wallet is worth exactly the same as one Bitcoin in another person’s wallet. The same holds true for national fiat currencies: Every U.S. dollar bill is interchangeable with another one. NFTs, on the other hand, are non-fungible, as no two are interchangeable. This has significant implications for various industries and could ultimately change the way we do practically anything.
David Sacco, MBA practitioner in residence at Pompea College of Business University of New Haven, explained his thoughts on the potential of crypto, blockchain and NFTs in an email to InvestorPlace.com:
“The fact that banks are talking about using blockchain to record their transactions tells me all I need to know about its potential. The biggest fear of [g]overnments and financial institutions all over the world is that people wake up one morning, log on to their financial apps and see a whole bunch of zeros. If the financial institutions think blockchain is the answer I believe it will become the DOMINANT form of digital record keeping in the next 5-10 years. IF that occurs [then] crypto currencies will become even more widely accepted.”
Investors can continue to profit from this altcoin frenzy and the expansion of blockchain technology with these seven NFT cryptos:
- Binance Coin (CCC:BNB-USD)
- Cardano (CCC:ADA-USD)
- Chiliz (CCC:CHZ-USD)
- Decentraland (CCC:MANA-USD)
- Enjin Coin (CCC:ENJ-USD)
- Ethereum (CCC:ETH-USD)
- Theta (CCC:THETA-USD)
For a more in-depth look at NFTs, check out Tom Yeung’s guide on the topic.
NFTs: Binance (BNB-USD)
Binance cryptocurrency exchange went live in 2017. Soon after, Binance Coin was launched through an initial coin offering (ICO). It currently powers the Binance Ecosystem. Some outside service providers, mostly in the travel industry, also accept the cryptocurrency.
BNB-USD opened around $571 this morning and has a market capitalization of about $86 billion. Over the past year, it is up about 3,516%. Put another way, the proverbial $1,000 invested in BNB-USD last April, would now be worth more than $35,000. In recent days, it went over $600, a record high.
The coin’s market cap should grow as NFTs become more mainstream. Furthermore, the company recently held a contest, calling “artists, creators and crypto creatives” to build NFTs of their work to win various prizes.
For our U.S.-based readers, we should remind you that the Binance crypto exchange, which is headquartered in Hong Kong, does not serve U.S. users anymore. However, it has a dedicated U.S. exchange, called Binance.US that was launched in September 2019.
Cardano is a blockchain platform, and ADA-USD is its native currency. With a market capitalization of about $46 billion, ADA-USD is now among the top-10 cryptos. In the past 12 months, it has returned over 4,200%, and its price currently hovers around $1.40. Just this morning, it was at a record high of $1.55.
The Cardano platform, set up by Charles Hoskinson, was released to the public in 2017. Notably, Hoskinson was a co-founder of Ethereum. Cardano is a Proof-of-Stake (PoS) blockchain. On the other hand, Bitcoin has a more costly Proof-of-Work (PoW) system.
The group is currently launching a smart contract ability, the Goguen Mainnet, whereby “Goguen adds the ability to build decentralized applications (DApps) on Cardano’s solid foundation of peer-reviewed research and high-assurance development.”
Charles Hoskinson has recently said that Cardano could soon support NFTs. If Cardano could indeed become a viable candidate to rival Ethereum in the NFT space, even higher highs in the ADA-USD price would certainly be possible.
We have so far discussed two altcoins, BNB-USD and ADA-USD. Next on our list is an NFT named CHZ-USD, “an ERC20 utility token on the Ethereum blockchain that serves as the digital currency for the chiliZ and Socios.com platform.” If you are interested in sports tokenization, then you might want to check out Chiliz, where fans can purchase or trade branded “Fan Tokens.”
On Socios.com, fans can buy tokenized voting rights for their teams. European soccer clubs, such as AS Roma, Atletico de Madrid, FC Barcelona, Galatasaray, Juventus and Paris Saint-Germain have joined the platform to offer fans ways to interact with the clubs. Meanwhile, Chiliz.net has become the first tokenized sports exchange worldwide.
CEO Alexandre Dreyfus has recently announced that the Malta-headquartered group will expand its U.S. operations, as “the company is preparing to launch fan tokens with franchises from the five major U.S. sports leagues.”
Chiliz is attaching monetization methods for sports and e-sports organizations. If you believe the group could have further to go, then you might want to keep an eye on CHZ-USD. It currently has a market cap of around $2.7 billion, and the price hovers at 45 cents. In the past year, CHZ-USD is up more than 7,100%.
From sports, we move to another Ethereum-based blockchain platform — Decentraland, a 3D world. Here, users can purchase or build digital real estate and monetize virtual reality applications. It was initially created in 2015.
On Decentraland, there are parcels known as LAND (an ERC-721 token), which can be purchased with MANA-USD (an ERC20 token). LAND owners have control over the environment and applications they operate. They also receive all of the income generated by their creations. Users who own MANA-USD can vote on policy updates, land auctions and policies, such as subsidies for new developments.
MANA-USD currently has a market cap of about $1.7 billion, and the price hovers at $1. Investors can store it in ERC-20-compatible digital wallets. Digital asset manager Grayscale Investments, which owns the Grayscale Bitcoin Trust (OTCMKTS:GBTC), has recently announced it will enter the world of DeFi with five new new trust offerings. One of them is MANA-USD. The new trust could see more institutional and retail money to move into this NFT crypto.
Enjin Coin (ENJ-USD)
Enjin is a blockchain-based game and app developer. It was founded in 2009 as the Enjin Network, a gaming community platform. Today, it has more than 20 million users.
The company now offers “an ecosystem of integrated products that make it easy for everyone to develop, trade, monetize and market with blockchain. … Enjin’s tools enable game developers and studios to utilize tokenized digital assets as part of their acquisition, retention, engagement and monetization strategies.”
Enjin Coin enables users to exchange NFTs that are created on the platform. ENJ was launched in 2017 through an ICO. It is an ERC20 token built on the Ethereum network. ENJ-USD has a market cap of $2.3 billion and the price is just under $3. Over the past year, the token has returned over 3,400%. In early April, Coinbase launched ENJ-USD on its platform, helping turbocharge the price.
According to Kriptomat, “Developers need to lock ENJ tokens in order to mint virtual items. When a player obtains these items, they can use them ingame, trade them or even sell them for ENJ.”
Recent metrics suggest, “The global gaming market was valued at USD 162.32 billion in 2020 and is expected to reach a value of USD 295.63 billion by 2026, registering a CAGR [compound annual growth rate] of 10.5% over the forecast period (2021 – 2026). Game developers across emerging economies are continually striving to enhance gamer’s experience, launching and rewriting codes.”
If you believe Enjin’s platform with its suite of software development kits (SDKs) can capitalize on this growth, then ENJ-USD deserves your attention.
ETH-USD is the native cryptocurrency of the Ethereum platform. The importance of the decentralized, open-source Ethereum blockchain in the development of NFTs cannot be understated. But in recent months, it’s Ethereum’s smart contract functionality that has been attracting significant attention. Its ledger technology enables companies and developers to build new programs and applications.
With a market cap of around around $269 billion and a price of $2,330, ETH-USD is the second-leading cryptocurrency behind Bitcoin. Ethereum has returned over 1,370% in the past 12 months and hit a record high this morning, just shy of $2,400.
One of the most important developments for ETH-USD has been the recent introduction of dollar-based Ether futures contracts on the CME (NASDAQ:CME), the world’s leading derivatives marketplace. Bitcoin futures were similarly introduced in late 2017, becoming a catalyst to the growth of BTC-USD’s market cap. Therefore, we can expect Ethereum futures contracts to increase the crypto’s profile.
Our final NFT crypto is THETA-USD, the native cryptocurrency of the blockchain-based video-streaming platform Theta, an open-source project. Among the platform’s advisors are Steve Chen, co-founder of YouTube, owned by Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), and Justin Kan, co-founder of Twitch, owned by Amazon (NASDAQ:AMZN).
Operating a video-streaming service is a costly business. Traditional content-delivery pipelines face issues of bottlenecking. And that is where Theta Labs comes in. According to Chen, “Theta’s innovation is set to disrupt today’s online video industry much in the same way that the YouTube platform did to traditional video back in 2005.” He points out that Theta creates “a decentralized peer-to-peer network that can offer improved video delivery at lower costs.”
For instance, users of the platform can contribute excess bandwidth and computing resources. In return, they receive payment in THETA-USD tokens, the native crypto of the platform. THETA-USD, which has a market cap of $11.5 billion, is currently hovering around $11.60. Over the past 12 months, it has returned over 14,770%. In other words, $1,000 last year would now be worth more than $147,000.
In March, Sony (NYSE:SONY) Europe joined Theta Labs’ “enterprise validator and governance council program.” It has also been in the news for collaborating with Cinedigm (NASDAQ:CIDM), which develops streaming entertainment channels. Cinedigm will integrate Theta Labs’ “peer-to-peer streaming technology, blockchain protocol and Theta Fuel (TFUEL) micropayments” into one of Cinedigm’s branded channels.
If you believe the new cheaper and decentralized infrastructure that Theta is trying to provide for video streaming businesses will be successful, you need to keep THETA-USD on your radar.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.