NFT boom, which started last year, still keeps the attention of investors and traders all over the world. According to DappRadar, NFT sales hit $25 Billion in 2021. As of now, the trend shows no signs of slowing down, and we now see large corporations entering the NFT playground, trying to make the most of it. As large companies move into the space, they turn into NFT stocks, But is it just a tool to eat off the hype pie, or a serious undertaking that stands for something much bigger?
In this article, we will analyze the phenomenon of NFT stocks and make an overview of those worth considering, when investing in your next NFT.
What are NFT stocks?
Non-fungible tokens are attractive because apart from opening large horizons to the artists and allowing them to easily monetize almost any object of digital art, NFTs also make it easy to prove the ownership of the piece of art for the holder. The blockchain record of transactions related to a digital asset can certify that a particular NFT is unique as well as the inability to alter the information kept on blockchain makes it easier to verify the owner.
The NFT stock was coined as a term to denote publicly traded companies that enter the NFT scene. The relation of these companies to the NFT market can be absolutely different. It can be Adidas launching the sales of an NFT collection, Twitter selling their first Tweet as an NFT for $2,5 million, or eBay and Shopify allowing users to trade NFT tokens using their platform.
Coca-cola, Disney, Playboy, Nike, Gucci, Fiverr, Cloudflare, Facebook, Instagram, Coinbase and Mastercard are among the few brands that have announced their plans to integrate NFT into their business activities. Some, have already started doing this. Large businesses may have different reasons to turn to the NFT medium and these may include:
- Additional funding, like in case with Adidas, Coca-cola, Nike, Gucci etc. These companies are already selling NFT collections to their consumers.
- Building infrastructure for the market, like in the case with eBay, allows buying and selling NFT on their marketplace. A brighter example would be the partnership of Coinbase and Mastercard. The top crypto exchange recently announced its plans to launch an NFT marketplace that will enable users to buy NFTs with their Mastercard without passing any KYC checks.
- Riding the Hype: Announcement that a company plans to enter the NFT market, draws more attention to it and causes its shares to appreciate in value. This recently happened to GameStop. A gaming company whose price has been in the turmoil of events thanks to Wallstreetbets Reddit forum, announced their plans to create an NFT marketplace and establish a variety of crypto partnerships. As a result, GameStop shares have grown by 27%.
- Widening the target audience. Being a popular trend among young people, NFT may be considered as a marketing tool to draw attention from those between 18 and 35. Like in the case of Playboy: a company started to lose its popularity a few years ago but tried to reclaim it with NFTs. Last year, Playboy launched a collection of Rabbitars, which offers exclusive membership to rabbit holders.
Best NFT stocks to watch
At the moment it is clear that NFTs are here to stay with us for some time. Thus, not only engaging in NFT but also in NFT stocks may be considered to be a great long term investment option. The most important thing to do here is to choose the right stocks to invest in.
Few factors should be considered when making a decision.
- Is it an already established company?
- Are the proposed NFTs utility-based?
- Does the use of NFT by the company create any additional value for stakeholders?
- Is the company innovative?
- Does the company have a large and loyal following?
Based on our analysis, the NFTandGameFi team prepared a few NFT Stocks to follow in 2022.
Coinbase (COIN). Being one of the most popular companies of the crypto industry, Coinbase has become one of the biggest and most reliable crypto exchanges, operating in more than 100 countries around the world. Profound knowledge of the crypto market and a large number of crypto savvy users, who know the mechanics behind purchasing digital tokens, make it easy for the company to enter the NFT scene and market its new product quickly. And besides, the partnership with Mastercard will open the NFT horizons not only for the crypto audiences, but also those who can’t boast the knowledge of how Metamask works.
More NFT News…
Twitter (TWTR). Over the last few years, Twitter has become a haven for crypto enthusiasts. This is one of those places where news are born and where one can find the latest info from the top crypto influencers and top crypto and NFT projects. With this kind of audience concentrated on the platform, Twitter is now looking to integrate NFT into their platform. Apart from selling the first tweet ever for $2.5M, Twitter rolled out their new tools for NFT verification of the avatar just a couple of days ago. The new NFT avatars will show up as a hexagon, instead of a circle, and users can click on them to get more information about the artwork, including its creator and where it’s listed. This might also be a great plus for the community, as such avatars will definitely boost NFT sales.
Meta (FB). Former Facebook recently became Meta and it looks as if Marc Zuckerberg also had ambitious NFT plans for the future of the company. Apart from developing tools to verify NFTs on social media profiles of Facebook and Instagram users, Meta has also announced its plans to create a marketplace that would allow Instagram and Facebook users not only to trade but also to create their own NFT and sell them. Last October, Meta also created a Novi currency, which aims to be the central means of payment in the upcoming NFT marketplace. Still, the large number of scandals happening around Facebook for the last few years make it look like the whole NFT and Metaverse endeavour is just a way to clear the company’s karma.
Summarising the NFT trend
Be it just a call for the hype or an incremental diversification plan, the news of today pester with large corporations jumping on the NFT bandwagon. Some of these companies intend to roll out metaverses, whilst others link NFTs to limited clothing collection access and other merch perks. Given all this, the message is clear. NFTs are here to stay and their use is set to rise further.
The most important point to note, is that it is only the utility NFTs that have a chance to stand the test of time and it is the companies that integrate the token’s utility function, that make sense to watch. Although some NFTs don’t boast much purpose, this should by no means assume that it cannot be introduced. Therefore, blue chip companies have a great chance to make it large as NFT stocks, as long as there is utility, functionality and benefits for the audiences.