NFTs Usher in a New Renaissance for Art … and a New Way to Invest in It

There’s a new asset class in town, and oh man, is it fun!

Before I tell you about it, let me tell you why I’m so excited about it.

I’ve spent most of my career trading in traditional financial markets with a core focus in currency trading.

What I love about trading currencies is that they offer three things that you really want to have when you’re trading any market: liquidity, volatility and 24-hour access.

I call them the Three Amigos.

So, when cryptocurrencies rolled into town, we were introduced to a new market offering these three attractive features.

Since then, things have evolved further in the space of decentralized technology with the birth of non-fungible tokens (NFTs).

•  I won’t spend time on all NFTs’ technical jargon, but I’ll say this: They’re game-changers for the digital world.

Pre-NFTs, there was no such thing as assigning value to digital creations ... how could you?

Digital works are easily saved and copied. But now, thanks to the blockchain, you can take a digital creation and assign a digital contract to a specific copy (or copies) to prove ownership.

•  This is a HUGE deal — it means digital creations can now be designated as digitally scarce assets.

One awesome application of NFTs is in the world of art. It’s important to appreciate that up until a few years ago, digital artists didn’t have the ability to create art that could be featured and sold in galleries.

•  Before NFTs, there was no way for digital artists to assign value to their work.

Suddenly, these artists — who were expressing their talents through digital medium — were able to give their art rarity status … meaning only those who held the NFT could claim ownership of it.

This sets up an amazing opportunity to be investing in this space, especially at a time when we’re only beginning to scratch the surface.

This period — right now — will be written about in art history books, and the art being collected in the digital world will be credited for the birth of this new renaissance. Pretty cool.

NFT by digital artist Fewocious titled “Rage & Love”  Source: SuperRare

As much as I love art, I also love the economics around it.

•  And now that we have economics built into the world of digital art, it’s become a tradable market like any other.

So just how good is this market as a tradable one? And is there really a tremendous opportunity here?

YES.

Again, great markets have three critical ingredients: they’re liquid, volatile and always open.

Amigo No. 1: Liquidity

The internet is a vast space connecting millions of people. All of these people are potential participants in the market with the ability to discover and trade digital art.

Access to this market is wide open. There’s no longer a need to physically be in a gallery on the other side of the world to view a work of art.

Now you can see that art in its optimal form right on your screen. When you have this many people with access to the market, you’re going to get a secondary market with the potential for incredible liquidity.

The possibilities here are far more exciting than what we have in the world of physical art.

Amigo No. 2: Volatility

The other cool thing here is that — while there can be rapid price appreciation in art — it’s highly subjective. When trying to figure out how close the price of a piece of art is to its value, the range can be quite wide.

Trading is all about finding the disconnect between price and value.

This is where the opportunities present.

This disconnect is more commonly described as volatility. And if you're good, volatility is your friend.

Amigo No. 3: 24/7 access

The world of decentralized technology’s opened the door to 24/7 markets.

We don’t have to wait for Sotheby’s, for example, to conduct live contemporary art auctions in New York, London or Hong Kong.

We now can trade at every hour of the day, every day of the week.

So, there you have it folks. We’re staring at a beautiful market filled with liquidity, volatility and 24-hour a day access. This market sits at the intersection of art, finance, technology, culture and peer-to-peer interactions.

Welcome to the future of investing. How can you not want to be a part of this?

NFTs are really changing the way we interact with art … and with one another. Speaking of which, if learning more about the NFT universe is something you’d be interested in, send us a tweet at @Weisscrypto.

Best,

Joel Kruger