The chief strategy officer of digital asset manager CoinShares says that the surging non-fungible token (NFT) market is not a bubble.
In a new tweetstorm, Meltem Demirors points to the scarcity of various NFT projects and Bitcoin as a potential key factor motivating investors.
“Are NFTs a bubble? No. Wealth is a bubble…
For the first time in history, more than 1% of adults around the world are millionaires – that’s 56 million millionaires. Their total net worth stands at $158 trillion. There are 21 million Bitcoin. There are 10,000 Punks. There are 100 rocks.”
Demirors says that NFTs are status symbols for a new class of consumers.
She also says that NFTs can be fractionalized, are capable of shared ownership and can be used as collateral in on-chain financial markets, unlike traditional luxury goods such as bags, watches and shoes.
“The global market for luxury goods i.e. conspicuous spending is absolutely massive. NFTs are digital flex/status symbol for a new class of consumers, but unlike the traditional markets of wealth and status, they are open to anyone, anywhere with verifiable scarcity.”
Demirors also says that spending millions on NFTs is not necessarily a strange idea.
“For those who say spending millions on JPEGs is dumb and we should be solving world hunger, please give the folks on the trad art collector list a call first. People are spending $200 million on blobs of paint. How is spending $2 million on blobs of pixels any less noble?”
In 2020, NFT marketplace OpenSea processed only $21 million in transaction volume, but on August 8th the platform smashed records with $78.8 million in daily transaction volume.
Amid the explosive growth of the industry, Demirors says she chooses to embrace NFTs.
“So there are three options
1: do nothing
2: embrace NFTs, dive in, and attempt to learn and understand…
3: mock NFTs as a bubble and nothing more than elaborate money laundering, just as you mocked bitcoin 5 years ago.
I choose 2.”
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Featured Image: Shutterstock/GavrBY/Damir Khabirov