Like many others this past holiday season, I got my hands on one of Meta’s Oculus Quest virtual reality (VR) headsets. I’ve been covering the metaverse and tokenization for a while now, so naturally, I couldn’t wait to experience Mark Zuckerberg’s take on what the metaverse could be.
I fire up Horizon Worlds, and I quickly notice how responsive it is to my movements.
I wave, and my avatar waves. I nod, and my avatar nods.
Incredibly, I can even recognize a fellow player-character’s embarrassment through their body language. We’re in a comedy nightclub, and another person picks up the mic and jokes about this person’s Sons of Anarchy outfit, sending the leg-less crowd into a frenzy. The avatar slouches a bit before joining in on the laughter.
To be fair, since none of us had legs, we all looked awfully ridiculous.
Here’s the thing: Facebook’s Horizon Worlds is only a taste of what’s to come in a truly decentralized, blockchain-enabled metaverse. Within it, the clothes on your avatar’s back will belong to you. And any public shaming of your clothes will feel as scathing and personal as it did back in middle school.
I run into the guy again outside the comedy club, noticing his handle features the acronym “NFT.”
“You like NFTs, huh?”
He nods, and we chat for a bit — not long but enough to hear his vision for the future:
“Like the internet, the tokenization of things will affect everything — how we consume content, how we work and even how we live!”
I’m aware of these things, of course, but to hear it come from some random person in a virtual space is oddly reassuring.
He continues, “… And all our physical stuff will be replaced with virtual approximations, which we’ll own and be able to trade and sell, etc.”
It was refreshing to hear such pure, unbridled optimism for the future.
Suddenly, a voice interrupts.
“Hey! How’s your experience so far? Is there anything I can help with?”
It turns out that this person is a community host of sorts, but they won’t confirm that they’re employed by Facebook.
It’s a stark reminder: This world, as interesting, weird and cool as it is, is not mine. It’s Facebook’s world, and I’m just living in it.
This doesn’t sit right with many. In fact, because of the involvement of Mark Zuckerberg & Co., “nerd culture” at large has reacted to this metaverse with vitriol.
Where to start?
First, recall that the term “metaverse” comes from the Neal Stephenson’s 1992 novel Snow Crash. Its characters enter the metaverse to escape a bleak world where corporations wield the influence of governments.
Now enter Facebook. Fresh off several scandals, including the fiasco with Cambridge Analytica, the company again courted controversy when the Wall Street Journal published The Facebook Files.
The findings underlined the dystopian power Facebook wielded, including knowingly facilitating the spread of false information, prioritizing engagement over the well-being of users, failing to moderate the spread of religious hatred in India, and so much more.
It’s safe to say that Facebook isn’t winning any humanitarian awards any time soon. When it changed its name to Meta and announced its intent to pivot from mobile to metaverse, what seemed like the collective whole of the internet recoiled in horror.
One comment read:
“Facebook creates real-world dystopia, then creates metaverse to escape said dystopia. This is fine.”
The media followed suit. And over the next few months, article after article was published criticizing a Facebook-owned metaverse.
The read on the room was clear — any metaverse controlled by Big Tech would be a dystopian nightmare.
How Did We Get Here?
Following the road back from this point is winding, narrow and puts you dangerously close to falling off into the deep end. But in short, it’s paved with the general distrust of tech corporations and the billionaires who run them… a lack of faith in products co-opted by corporate interests, no matter how pure-hearted and optimistic its original intent…
Sure, dissent and distrust are a part of any culture-shifting megatrend. But it’s not just Facebook and Big Tech. Ever since the Covid-19 pandemic first struck and forced the country to lock down, boredom and a lack of sports-betting led to an increase in amateur traders. This coincided with an entirely new kind of investment: meme stocks.
Basically, a small forum on Reddit called WallStreetBets rallied together over a single stock: GameStop (GME). These retail traders found a way to win against large institutional investors by using Robinhood (HOOD) to buy GME stock in droves, exploiting GME’s unusually large short interest.
The spike in GameStop’s stock price forced short sellers to cover their position, which nearly put Melvin Capital out of business.
Other financial companies took notice and soon lowered their fees to zero to compete with Robinhood and attract its users.
Since then, other meme stocks have popped up. And what began as a story of the average person beating the system turned into raw greed, accentuated by moon emojis and a cult-like mantra that “apes together strong.”
As crypto began their 2020 resurgence, meme coins became the new meme stock. Or rather, thanks to the popular Dogecoin (DOGE-USD), “pup coins” took center stage. Pretty soon, everybody was talking about cryptos, the blockchain, ICOs (initial coin offerings).
Then everyone was talking about NFTs.
NFT, which stands for “non-fungible token,” is a one-of-a-kind digital asset.
Think a celebrity’s tweet or a digital trading card, a digital piece of art or an in-game item.
They are collectibles that act, look, feel and operate just like their physical counterparts. And NFTs are just now becoming a thing because of the blockchain.
The mechanics of this are complex. But at a high level, the blockchain’s immutable and distributed ledger has allowed humans to collectively verify the authenticity of a digital asset and, therefore, confirm its uniqueness.
Before blockchain technology, a digital piece of art could’ve been copied and sold a million times, rendering it worthless. But with the blockchain, the original can be verified and now contains significant value.
That original is the NFT.
And this authentication lays the groundwork for the NFT market to boom over the next decade. We’re not just talking digital art. We’re talking digital real estate, toys, trading cards, artwork — it’s seemingly endless.
The NFT market is exploding right now, and it makes sense why. After all, folks pay millions and millions of dollars for unique physical assets, like sneakers and signed cards. Now they’re doing all that online. They’re paying millions and millions of dollars for unique digital assets.
And when I say millions and millions of dollars, I’m not exaggerating. When Christie’s sold its first wholly digital artwork, the buyer forked over $69 million.
This is a huge and rapidly growing market.
But after NFTs suddenly began to surge in popularity, media outlets quickly rebuked them for their massive carbon footprint.
Immediately, the conversation against NFTs took two turns: A) It was a scam to separate rich idiots from their money in exchange for a JPEG. B) It was a planet-heating venture that unleashed millions of tons of carbon emissions on the environment.
As the arguments go, NFTs — which will be the virtual representation of physical goods in the virtual world — were directly contributing to the Snow Crash dystopia from which the metaverse is an escape.
The narrative had gone completely off the tracks.
And to make matters worse, the blockchain economy has its fair share of opportunists and scammers…
The Rug Pull
When a team of anonymous developers behind a crypto project blatantly riding the hype of Squid Game launched the biggest pump-and-dump scheme ever executed, the rise of crypto scams was put on wide display.
Long story short, this group launched a crypto project called — you guessed it — Squid Game. In their game, people would buy the Squid Game token and use it as “buy-in” to play virtual games modeled after the show, like Red-Light, Green-Light and Honeycomb.
The winners of those games would then receive real-money prizes.
Pretty neat idea — until you read the fine print.
Squid Game’s developers created this “anti-dumping mechanism,” which, although it sounds positive, was just a way for the developers to lock people into the token.
Basically, once you bought the Squid Game token, you couldn’t sell it until you gathered what the devs called “marbles.” And marbles could only be acquired by winning one of the various games on the platform.
Makes sense. But those games weren’t live, so no one could actually win any marbles.
In other words, selling the Squid Game token required marbles, which were impossible to acquire because the mechanism by which you acquire marbles — playing the games — hadn’t even launched.
It was the Squid Game developers’ evil way of locking people into the token. Once you bought it, you couldn’t sell it.
That’s why the token soared in price so quickly. There were basically no real sellers — just buyers.
We remember first stumbling across the token on Tuesday, Oct. 26. It was trading around 2 cents. On Nov. 1, it hit a high of $2,861.
Then in a matter of seconds, it plunged 99.9% to below a penny.
That was the rug pull. Squid Game’s developers — who were sitting on a bunch of its tokens — gave themselves permission to sell their tokens without marbles and sold them all.
They walked away with $12 million, and everyone else lost pretty much everything.
It’s a sad story — and a lesson in why you shouldn’t gamble on tiny cryptos with suspicious backgrounds.
But in our opinions, the sadder story here is how some media outlets are using this as an indictment of crypto, the metaverse and NFTs.
It’s not just silly. It’s irresponsible.
Let’s make one thing crystal clear: The Squid Game rug pull is not indicative of the broader crypto markets.
Just like there are penny stock frauds and pump-and-dump schemes in the stock market, there are bogus tokens and rug pulls with crypto. It’s no different. And just as you don’t avoid investing in the stock market because of penny stock scams straight out of The Boiler Room, no one should avoid investing in cryptos because of rug pulls.
While Squid Game saw its token collapse 99.9% in a matter of seconds, most of the tokens I follow in our portfolio surged.
The key to succeeding in the stock market is to pick the best stocks. And the same is true in the crypto markets: Pick the best cryptos — not those named after “Squid Game.”
So this is really our long-winded way of saying: Do not let what happened with Squid Game token or what is happening with all these “pup coins” deter you from investing in the crypto markets.
I’ll be candid with you. I find it difficult to branch out beyond main coins like Bitcoin (BTC-USD). From a pure “crypto-picking” perspective — with only a few online articles at your disposal — it’s terrifying to think you may make a wrong turn and crash your finances into a wall. Just think of all the folks who, back in the ‘90s, invested in Pets.com — and sold Amazon (AMZN).
Therefore, I rely on my MAG Score, which analyzes 10 critical attributes of an altcoin and produces a cumulative score to tell us whether it’s a buy or not.
Using the MAG Score, I’ve found plenty of important, powerful and technologically sound cryptos out there that could impact enormous change on the real world. And they couldn’t be more different than Squid Game.
Let’s look at the first one that I believe to be one of the best examples of the potential of tokenization.
Wax (WAXP/USD): A Carbon-Neutral Ethereum-Killer
Despite being the most popular blockchain for NFTs in terms of financial value, Ethereum is plagued with issues. This is no secret.
As the first blockchain with smart contracts, Ethereum was — and still is — massively influential and valuable.
But being the first iteration of a technology isn’t always best.
Competition that emerges later can more easily optimize to overcome challenges that weren’t foreseen. Getting a relatively late start, from scratch, can be a significant advantage in some ways.
Now, Ethereum does a whole lot well. But it also does some things poorly.
Most egregious of all its shortcomings is its inability to handle a lot of transactions at any given time.
Because of this, the fees associated with performing actions on the its blockchain are out of control. And the more popular Ethereum becomes, the higher the price of ETH goes — and the more imposing these fees become.
If you aren’t familiar with “gas fees,” they are essentially costs that users pay to everyone who runs Ethereum nodes all over the globe. Contributing to the operation of this decentralized network of nodes is incentivized because the more decentralized the network, the more secure.
For some context, at the time of writing this, it would cost you somewhere around $140 worth of ETH to buy an NFT on the most popular Ethereum marketplace, OpenSea.
And that cost doesn’t include the cost of the NFT purchase itself. So if you wanted to buy an NFT for $1, you’d end up paying $141 — $1 for the NFT itself and $140 for the gas fee.
Gas fees for other actions on the blockchain — such as sending money to a friend — are lower but still in the double-digit dollar range.
Imagine if buying a coffee were to cost you $3 for the coffee itself in addition to a $20 fee. Only the wealthiest people would buy coffee. Everyone else would become their own at-home barista.
These high fees keep the average individual from interacting with blockchain technology, aside from buying and selling cryptocurrencies.
Not only is it fairly inaccessible, but onboarding for many blockchains is super confusing for newcomers.
Seed phrases, hot and cold wallets, gwei and so on — it’s all gibberish unless you put in a good amount of work to become familiar with the technology.
But there’s one blockchain that’s lightyears ahead of the competition — especially when it comes to games — where quick, cheap transactions are an absolute must — WAX (WAXP-USD).
The WAX blockchain was co-founded by William E. Quigley and Jonathan Yantis, two extremely qualified individuals with loads of relevant industry experience.
William spent eight years with Disney (DIS), was early to join the infamous Bill Gross-led Idealab, co-founded Tether (USDT-USD) and was an early investor to popular companies such as Coinbase (COIN) and Circle.
Jonathan was once COO of the largest in-game item marketplace and was a board member of the first Initial Coin Offering (ICO) ever.
These two know their stuff, especially when it comes to crypto, gaming and growing companies.
Their WAX technology is a self-proclaimed “purpose-built NFT blockchain.” It was originally constructed on top of Ethereum in 2017, but it later transitioned away from it to get past Ethereum’s too-limited NFT capabilities.
WAX was built with NFTs in mind from the very beginning. This, in theory, means it should be more optimized than other blockchains for the specific use cases that NFTs make possible.
Since it uses Delegated Proof-of-Stake as its consensus protocol and takes a small percentage of money from NFT sales (not other transactions), it essentially eliminates fees completely for the average end user.
And with no gas fees and the ability to handle up to 8,000 transactions per second, games that are created on the WAX blockchain can easily be played by far more people than games on Ethereum. After all, Ethereum can only manage around 30 transactions per second at this point.
In fact, WAX is currently the single most-transacted-on blockchain — by a large margin.
Though some new competitors have entered the space with transactional capabilities that exceed WAX’s, they have yet to surpass WAX’s sheer volume of traders and transactions.
What WAX lacks in monetary volume traded, it makes up for elsewhere.
And if it can pique the interest of investors and collectors with larger wallets and more social influence, it’d have the best of both worlds.
WAX is also heavily focused on “vIRL NFTs,” which are NFTs that are linked with and redeemable for physical goods in the real world. The most recent vIRL to launch on WAX was a Hasbro Power Rangers “Zord” NFT that includes a limited-edition physical toy as well.
The vIRL use case of WAX could lead it to become the go-to blockchain for NFTs that are tied to physical goods. And since many physical brands are looking to get into the crypto space, there’s near-unlimited potential for the number of people these brands could bring to WAX.
WAX already boasts an impressive number of big-name brands, which could ultimately lead to more brands following suit. Brands such as Hot Wheels, Hasbro, Funko, Capcom, Funimation, Garbage Pail Kids, Atari, Reebok and Topps have already released NFTS on WAX’s blockchain — including some vIRLs that can be redeemed for physical products.
And WAX is insanely popular in the blockchain game space. That’s why it has the most active users of any blockchain. Splinterlands and Alien Worlds are just two of the most popular. Recently, a valuable Splinterlands NFT sold for nearly $700,000. Even though most gamers on WAX aren’t buying or selling large-ticket items, if they all stick around, the amount of value they put into the system in the long-term could be enormous. Not only that, but folks that begin their WAX journey playing games and buying game-related NFTs may someday branch out into collecting other NFTs as well.
An Ethereum bridge and Ethereum Virtual Machine (EVM) are currently in development for WAX. And these two things could be massive for the WAX ecosystem. The bridge, currently in the Alpha phase, lets users transfer assets between Ethereum and WAX. An EVM will mean that any of the very many Ethereum developers will soon be able to effortlessly deploy their smart contracts on WAX, giving rise to even more DeFi and game projects on the faster, more eco-friendly blockchain.
And perhaps one of its most important attributes, WAX is among the easiest blockchains to get started with. For the most popular WAX wallet, the “WAX Cloud Wallet,” all you need is a social media login or email-password combination, and you’re good to go — no seed phrase necessary. This could scare some users away, but you can rest assured that there are still non-custodial wallet options for more advanced users. In general, the easier, custodial wallet will be more than ample for most people who are new to the space. And with such an easy onboarding process, WAX can grow rapidly.
However, WAX lacks projects with lots of hype and influencer backing. Ethereum has CryptoPunks and Bored Ape Yacht Club to name just a few. Other chains have decently large NFT projects as well. With a great deal of WAX’s popularity residing in NFTs released by brands and games, there’s not as much social influence drawing newcomers and big spenders to the space. And since people are spending less money on WAX, on average, there’s less incentive.
Corporate adoption alone isn’t all that matters. WAX will need to gain more widespread adoption among creators and collectors, or it could find itself stuck as the go-to blockchain for brands. While not inherently bad, it would certainly limit the scope of its use.
Also, WAXP — the native token on the WAX blockchain — isn’t yet as easily accessible as other cryptos for some folks. Until its recent listing on Crypto.com, WAXP was even more inaccessible to those in the U.S. than it currently is. It still isn’t on Coinbase or FTX, but it at least seems to be closer to being listed on more major exchanges. And once it does so, investor interest in WAXP could explode with as much fervor as its competitors.
WAX is not a new blockchain. It hasn’t received the most attention, despite being the No. 1 most-transacted-on blockchain. But it is battle-tested and rapidly growing stronger. It will have to compete with a growing list of competitors now that some folks are leaving Ethereum for more affordable blockchains, but even so, it has some major advantages. It has obtained numerous key brand deals and is more prevalent in the vIRL physical product space than its competitors. Not to mention, it’s among the easiest blockchains to get started with due to its simple cloud wallet and zero transaction fees. Though the native WAXP token could be easier to obtain for U.S. citizens, it could find its way to Coinbase or a similar exchange soon enough — and soar.
LooksRare (LOOKS/USD): Democratizing Fees for Everyone
A lot of folks can’t comprehend spending any amount of money on an NFT. Yet, NFT trading volume clocked in at a whopping $230 BILLION last year — a jaw-dropping 230X increase from 2020!
But to us, it’s hardly surprising.
The blockchain has added an unprecedented validation layer to digital assets, giving them ostensibly equal value to physical assets. What happens next?
We have precedents.
When digital shopping became just as good as going to the mall, we all started shopping online.
When digital media became just as entertaining as going to the movies, we all started streaming content from our own homes.
And when digital communications became just as accessible as writing letters, we all started texting.
History is clear on this. When a digital process becomes just as good as its physical “mirror,” it replaces it.
Why would digital assets be any different?
They won’t. NFTs will follow the exact same trajectory as everything else. And in time, the NFT market will balloon into a multi-trillion-dollar market.
At the forefront is a crypto that supports a next-gen NFT marketplace and is pioneering a first-of-its-kind, “everyone wins” model. This approach is a potential game-changer. And if consumers agree, this token could win big.
Its name? LooksRare (LOOKS-USD).
LooksRare is a brand-new NFT marketplace that launched on Jan. 10, 2022, as an alternative NFT trading platform to industry leader OpenSea.
The unique value prop of LooksRare is that it actively rewards traders and creators for participating in its ecosystem.
That is, like other NFT trading platforms, LooksRare charges a fee on every transaction — though that fee clocks in at an industry-low 2%. And unlike other NFT trading platforms, those charges are earned directly by individuals who are staking LOOKS tokens.
In other words, the legacy business model for NFT trading platforms is to charge — and keep — transaction fees. LooksRare charges transaction fees and distributes those fees to stakers, who are often users and creators on the platform.
It’s a truly democratized reward model.
And thanks to this new standard that rewards “the people,” LooksRare has attracted a ton of attention and usage since its launch. Daily trading volume on that platform has already exceeded $394 million.
The NFT realm requires marketplaces. There will very likely be more than one successful NFT marketplace at scale. OpenSea is the incumbent, and there aren’t many other large platforms out there. Therefore, the door is open for multiple startups to establish themselves as early industry leaders.
LooksRare’s business model of paying fees to stakers is novel — and should resonate deeply with the NFT community.
Early usage trends are very promising. It’s quite amazing that after just two days, the platform already experienced daily trading volumes of around $400 million.
This has “meme token” potential. Twitter is ablaze with LooksRare mentions. And while these things are impossible to predict, this token could be the next big instant winner.
Further, the valuation is compelling, with LooksRare valued at $1.3 billion on a fully diluted basis.
However, the developers are anonymous, and we’re not huge fans of projects with unknown devs. They also don’t have a great track record in the crypto markets. And because this is a brand-new platform and token, time is still needed to generate data on user stickiness and token trading patterns.
And the “meme” aspect to this token also implies huge risk, as the crowd could turn against LooksRare at any moment.
But the rewards may outweigh the risks here.
OpenSea was recently valued at $13.3 billion in a new round of venture funding. Meanwhile, LooksRare is valued at $1.3 billion today.
Let’s do some quick back-of-the-napkin math. If LooksRare nears the size of OpenSea, the token should be worth more than 10X its current value.
NFT marketplaces are a necessary and important part of the NFT ecosystem. Presently, the industry is controlled by a single centralized company — OpenSea.
LooksRare offers a fresh, decentralized version of OpenSea that’s built on the blockchain. Will it beat OpenSea at its own game? It could. And if it does, the LooksRare token will soar.
Enjin (ENJ/USD): The Economic Foundation of NFTs
So how should you invest in this explosive NFT market?
By buying an under-the-radar cryptocurrency that is the economic foundation of an innovative blockchain-powered platform for creating, managing, selling and buying NFTS.
And one such company is Enjin. It was founded in 2009 with the purpose of creating the tools developers would need to make the NFT market a massive success. All these tools are economically backed by Enjin Coin (ENJ-USD), its Ethereum-based cryptocurrency.
Specifically, Enjin’s core platform is a suite of solutions that enable developers to create, manage, sell and buy tokenized assets, including NFTs. These NFTs are infused with Enjin Coins, which gives them some tangible, real-life value, as ENJ has a monetary value. And it has also created a blockchain wallet purpose-built for NFT trading, with Enjin Coin as the central currency in that wallet.
Additionally, Enjin has developed EnjinX Marketplace, an online marketplace dedicated to NFTs, where you can buy and sell with ENJ. And, perhaps most interestingly, it has created a unique technology that allows those NFTs to be transferred via QR code scanning.
These products are not just ideas.
Many of them have gained tremendous scale over the past decade, as the NFT market has come into its own.
Enjin has, to date, installed nearly 2 million blockchain wallets, created over a billion tokenized assets, including NFTs — and sold nearly a billion of those assets, too.
In other words, Enjin has created the hyperscalable and widely used infrastructure underlying the NFT market.
And this is a market that could get quite big as the Blockchain Revolution digitizes the entire world.
In the first quarter of 2021, NFT sales measured $2 billion.
The sports card and memorabilia market is worth $5.4 billion globally. Global art sales hit nearly $70 billion in 2018. Revenue generated from in-video-game loot boxes will exceed $20 billion soon.
Combined, then, non-fungible digital artwork, trading cards and in-game items are attacking a near $100 BILLION opportunity. And that doesn’t include digital sneaker designs, domain names, social media posts, etc.
Long story short, there is a very reasonable argument for the NFT market to measure north of $100 billion one day.
Enjin Coin is at the epicenter of this market, providing the economic backing of a series of applications to create, buy, sell, manage and trade NFTs.
Yet, Enjin Coin has a market cap of just $1.58 billion today…
The upside potential here is huge — big enough that you may want to consider taking a position in Enjin Coin today.
History Repeats Itself
If you’re like most people, you probably take the internet for granted.
But there was a time when a world dominated by Google, Facebook, Apple (AAPL), etc., seemed as farfetched as a world dominated by blockchain companies.
That’s partly because the early pioneers and adopters spoke in absolutes, certain that the world would be changed by this next evolution in technology. They told of a world without boundaries, governments, nations — a world where everything and everyone is in reach.
Many of these early pioneers were programmers, of course. But they were also artists who shared in an optimistic worldview where the privileged few were no longer in control. To get a sense of this palpable techno-optimism, just watch the first two episodes of The Billion Dollar Code. The internet would democratize everything.
It wasn’t long before phone companies were attempting to make their own closed, metered version of the internet. But the backbone that is the internet — TCP/IP — didn’t win by default. It won by being better, more scalable.
These pioneers of the internet are the forebears of blockchain, the metaverse and tokenization.
Internet companies would become so hot that a wannabe entrepreneur only needed to put a “dot com” in their company name, sit back and watch the venture capitalists throw money at their feet. And naturally, this led to bad actors and scams.
Soon, media outlets ran with stories about how the internet is the playground of criminals; too dangerous to secure your data, much less your financial information.
Does any of this sound familiar?
While the internet would go on to change the world, it wasn’t the borderless, decentralized panacea early adopters hoped for.
The first iteration was Web 1.0. Think of it as a “read-only” experience.
The next was Web 2.0 — a “read and write” experience.
The problem with Web 2.0 is that it is owned by corporations. You log into Facebook and pay with your attention and information.
What cryptos and, most importantly, the technology behind them — blockchain — hope to accomplish is true decentralization.
This is Web3, the “read, write and own” experience.
This is the future! We are heading toward not only a digital but a tokenized world.
At its core, blockchain is built on decentralization and utilizes crowdsourcing to achieve tasks, as opposed to relying on a central authority or entity. From this perspective, blockchain itself isn’t the paradigm shift. The change is from centralization to decentralization, and this has been happening long before blockchain ever went mainstream.
Just look at Uber (UBER) or Lyft (LYFT). Those two companies have successfully disrupted the entire transportation industry by taking power from the few (taxis), giving it to the many (anyone with a car) and creating a system that optimally pairs supply with demand.
Airbnb (ABNB) has done this for property rentals, while Instagram has done this in the modeling and influencing world — think about the class of Instagram models that seemingly overnight became famous.
Meanwhile, YouTube has done this in the non-professional entertainment world; YouTube stars make big money with just a camera and a personality.
And Netflix (NFLX) has done this in the professional entertainment world. Think about all the original content the company is producing and how, notably, most of it doesn’t feature a Hollywood superstar.
Elsewhere, Shopify Inc (SHOP) has done this in the e-commerce world. Start-up internet entrepreneurs can now sell anything, anywhere.
In other words, decentralization is happening everywhere. And it’s working.
We firmly believe that this digital asset market will be as big as or even bigger than the physical asset market in the long run.
It’s a bold claim. Sure. But think about it. We have multiple precedents here. Let’s revisit…
As soon as digital shopping became just as “good” as physical shopping, everyone started shopping online. And now the e-commerce industry is on the cusp of becoming bigger than the physical retail market.
As soon as digital entertainment became just as “good” as physical entertainment, everyone started streaming Netflix, Disney+ and HBO Max. And now the digital entertainment industry is on the cusp of becoming bigger than the physical entertainment market.
And the same goes for digital advertising. It’s better than physical advertising. Within the next few years, digital ad spend will comprise more than 50% of total ad budgets.
Folks, the precedent has already been set!
As soon as digital replicas of physical industries become “good,” the digital takes over.
Why wouldn’t the same happen with the digital asset, or NFT, market? Spoiler alert: It will. And at scale, the NFT market will be bigger than its physical twin.
The investment opportunity, of course, is that the digital asset market today is a fraction of a fraction of the size of the physical.
In 2020, the global NFT market did about $338 million in transaction volume.
And the global collectibles market — physical trading cards, games, toys, cars and so much more — is a $370 BILLION market.
That’s more than 1,000X bigger.
By our logic, then, the global NFT market can — and will — grow by 1,000-fold over the next 10-plus years.
And the time to invest in this booming market is now.
Senior Investment Analyst