How to Invest in NFTs: The Market and the Opportunity
NFTs are one of the latest innovations backed by blockchain technology, and the market is heating up.
The post How to Invest in NFTs: The Market and the Opportunity appeared first on Investing News Network.
The world of digital investments offers a near constant level of innovation, and recently blockchain technology has come together with art investing to create quite the hot market.
Non-fungible tokens, commonly known as NFTs, are the digital assets at the center of the latest investment trend. They’ve gained attention from tech-savvy investors and could lead to a new highly speculative digital age in art investments.
But as NFTs and their variants rise in popularity among both crypto enthusiasts and other investors, an intense debate is growing about the effects of NFTs and whether or not the market is in a bubble.
Here the Investing News Network (INN) takes a closer look at the NFT craze and the almost unthinkable amounts of money being made by some early entrants.
What is an NFT?
NFTs are created around a specific item, whether it be digital or physical, and the ability to buy an NFT is based on blockchain technology.
Some of the most popular NFTs include pieces of art such as images, videos or GIFs. The flexibility of NFTs has allowed for some offbeat choices, like when Jack Dorsey, the co-founder of Twitter (NYSE:TWTR), sold his first tweet for US$2.9 million.
These digital assets aren’t new, but the recent explosion in interest can be traced back to a growing understanding of blockchain technology and the way it can interact with established items or events.
Thanks to their one-of-a-kind status, NFTs appeal to collectors — authentication mechanisms allow for one buyer to stand alone as the sole owner. Those and other factors have led to a burst of NFT activity, with purchasers willing to pay major sums to acquire these limited digital assets.
As mentioned, the NFT craze is closely associated with the art world. In March, the digital artist known as Beeple, Mike Winkelmann, sold an NFT for US$69 million through British art auction house Christie’s.
Noah Davis, a specialist in post-war and contemporary art at Christie’s, told the Verge the art piece from Beeple helped him see the potential attached to NFTs.
“He showed us this collage, and that was my eureka moment when I knew this was going to be extremely important,” Davis said. “It was just so monumental and so indicative of what NFTs can do.”
Christie's is proud to offer "Everydays – The First 5000 Days" by @beeple as the first purely digital work of art ever offered by a major auction house. Bidding will be open from Feb 25-Mar 11.
Learn more here https://t.co/srx95HCE0o | NFT issued in partnership w/ @makersplaceco pic.twitter.com/zymq2DSjy7
— Christie's (@ChristiesInc) February 16, 2021
In the NFT market, investors should be ready for anything to gain substantial value — items can go from seemingly absurd to a clear triumph in next to no time at all.
For example, earlier this year, an NFT of the shiba inu dog made famous by the “Doge” meme sold for US$4 million. One of the leads of the “Doge” NFT buying group, known as PleasrDAO, explained that an actual ownership stake in the digital asset will be offered to people through fractions.
“(I)t’s very much as if the Louvre decided to fractionalize the Mona Lisa and distribute a portion of it for the public to own. However, unlike at the Louvre, collective ownership of art is really only possible using crypto art,” Jamis Johnson, chief pleasing officer of PleasrDAO, said, according to a report from CNBC.
Pablo Rodriguez-Fraile, an art collector in the US, told Business Insider that myriad factors — including the price of bitcoin, the ongoing effects of the COVID-19 pandemic and distrust in the US dollar — have all helped fuel the boom in excitement surrounding NFTs.
Expert voices give support to larger NFT opportunity
Abhishek Sinha, a partner at EY and the firm’s open banking and blockchain leader, previously told INN he is supportive of the idea of NFTs, which he believes bring a spotlight to blockchain technology.
However, he expressed reservations at the idea that there’s a 100 percent clear understanding of the NFT market, even considering the recent surge.
“I’m not sure that everyone who was suddenly really interested in NFTs really understood what they were getting into and what the NFTs represented,” he said.
The expert thinks NFTs will play a greater role in the entire blockchain market.
“Do we think that NFTs are here to stay, and they’re going to be a valid medium for value exchange? Absolutely. I think they’re just going to get a little bit more business as usual, a little bit more mundane, a little bit more boring, but a lot more essential,” Sinha said.
Arry Yu, chair of the Washington Technology Industry Association Cascadia Blockchain Council and managing director of Yellow Umbrella Ventures, told Forbes there’s still a lot people don’t know about the investment proposition of NFTs. “NFTs are risky because their future is uncertain, and we don’t yet have a lot of history to judge their performance,” Yu said. “Since NFTs are so new, it may be worth investing small amounts to try it out for now.”
Evan Cohen, co-founder of Vincent, a search engine for alternative asset investing, wrote that investors need to be aware of the highly speculative nature of art investing, especially for digital assets.
“When investing in collectibles it’s best to have a long time horizon, as the long-term appreciation tends to be a safer bet,” Cohen commented.
NBA enters NFT market and adds to interest level
In 2021, the National Basketball Association (NBA) entered the NFT fray with the launch of NBA Top Shot, an NFT marketplace based on digital assets tied to highlights from basketball games.
“In plain terms: think of the future of the sports trading card market mixed with similar principles of cryptocurrency, but it’s virtual cards that contain individual NBA highlights,” the NBA explained.
The attention these highlights have received has led to rising interest as well as scarcity for the digital assets. In the online marketplace, users can pursue highlights from their favorite players or they can try to complete a specific series.
Roham Gharegozlou, CEO of Dapper Labs, told the Action Network that the concept is based on the idea of people being interested in owning a piece of memorabilia from their favorite athletes, even if they don’t physically have an item.
“We have a lot of believers in what we offer and we have people who don’t get it. That’s OK. We can’t please everybody,” Gharegozlou said.
In February, NBA personality and host Ros Gold-Onwude told SportsNation she has seen the growth of NBA Top Shots lead to a clear investment angle to this space. “At first it was about getting in and having fun and creating this community but there absolutely is an investor aspect to this and so you try to pick smart, maybe build a portfolio that’s worth something,” Gold-Onwude said.
She has become an advocate for NBA Top Shots and the general NFT space through social media.
Investor takeaway
The drive for innovation in investing methods never ends, and now thanks to the blockchain opportunity, NFTs have captured the imagination of investors looking for a new marketplace.
The versatility of NFTs offers a wide array of opportunities for those looking to add to their digital asset exposure. Time will reveal the status of this marketplace and the viability it may have long term.
Don’t forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
The post How to Invest in NFTs: The Market and the Opportunity appeared first on Investing News Network.
cryptocurrency bitcoin blockchain crypto pandemic covid-19 us dollar crypto goldUncategorized
Manufacturing and construction vs. the still-inverted yield curve
– by New Deal democratProf. Menzie Chinn at Econbrowser makes the point that the yield curve is still inverted, and has not yet eclipsed the longest…
- by New Deal democrat
Prof. Menzie Chinn at Econbrowser makes the point that the yield curve is still inverted, and has not yet eclipsed the longest previous time between onset of such an inversion and a recession. So he believes the threat of recession is still on the table.
Uncategorized
Half Of Downtown Pittsburgh Office Space Could Be Empty In 4 Years
Half Of Downtown Pittsburgh Office Space Could Be Empty In 4 Years
Authored by Mike Shedlock via MishTalk.com,
The CRE implosion is picking…
Authored by Mike Shedlock via MishTalk.com,
The CRE implosion is picking up steam.
Check out the grim stats on Pittsburgh.
Unions are also a problem in Pittsburgh as they are in Illinois and California.
Downtown Pittsburgh Implosion
The Post Gazette reports nearly half of Downtown Pittsburgh office space could be empty in 4 years.
Confidential real estate information obtained by the Pittsburgh Post-Gazette estimates that 17 buildings are in “significant distress” and another nine are in “pending distress,” meaning they are either approaching foreclosure or at risk of foreclosure. Those properties represent 63% of the Downtown office stock and account for $30.5 million in real estate taxes, according to the data.
It also calculates the current office vacancy rate at 27% when subleases are factored in — one of the highest in the country.
And with an additional three million square feet of unoccupied leased space becoming available over the next five years, the vacancy rate could soar to 46% by 2028, based on the data.
Property assessments on 10 buildings, including U.S. Steel Tower, PPG Place, and the Tower at PNC Plaza, have been slashed by $364.4 million for the 2023 tax year, as high vacancies drive down their income.
Another factor has been the steep drop — to 63.5% from 87.5% — in the common level ratio, the number used to compute taxable value in county assessment appeal hearings.
The assessment cuts have the potential to cost the city, the county, and the Pittsburgh schools nearly $8.4 million in tax refunds for that year alone. Downtown represents nearly 25% of the city’s overall tax base.
In response Pittsburgh City Councilman Bobby Wilson wants to remove a $250,000 limit on the amount of tax relief available to a building owner or developer as long as a project creates at least 50 full-time equivalent jobs.
It’s unclear if the proposal will be enough. Annual interest costs to borrow $1 million have soared from $32,500 at the start of the pandemic in 2020 to $85,000 on March 1. Local construction costs have increased by about 30% since 2019.
But the city is doomed if it does nothing. Aaron Stauber, president of Rugby Realty said it will probably empty out Gulf Tower and mothball it once all existing leases expire.
“It’s cheaper to just shut the lights off,” he said. “At some point, we would move on to greener pastures.”
Where’s There’s Smoke There’s Unions
In addition to the commercial real estate woes, the city is also wrestling with union contracts.
Please consider Sounding the alarm: Pittsburgh Controller’s letter should kick off fiscal soul-searching
It’s only March, and Pittsburgh’s 2024 house-of-cards operating budget is already falling down. That’s the clear implication of a letter sent by new City Controller Rachael Heisler to Mayor Ed Gainey and members of City Council on Wednesday afternoon.
The letter is a rare and welcome expression of urgency in a city government that has fallen in complacency — and is close to falling into fiscal disaster.
The approaching crisis was thrown into sharp relief this week, when City Council approved amendments to the operating budget accounting for a pricey new contract with the firefighters union. The Post-Gazette Editorial Board had predicted that this contract — plus two others yet to be announced and approved — would demonstrate the dishonesty of Mayor Ed Gainey’s budget, and that’s exactly what’s happening: The new contract is adding $11 million to the administration’s artificially low 5-year spending projections, bringing expected 2028 reserves to just barely the legal limit.
But there’s still two big contracts to go, with the EMS union and the Pittsburgh Joint Collective Bargaining Committee, which covers Public Works workers. Worse, there are tens — possibly hundreds — of millions in unrealistic revenues still on the books. On this, Ms. Heisler’s letter only scratched the surface.
Similarly, as we have observed, the budget’s real estate tax revenue projections are radically inconsistent with reality. Due to high vacancies and a sharp reduction in the common level ratio, a significant drop in revenues was predictable — but not reflected in the budget. Ms. Heisler’s estimate of a 20% drop in revenues from Downtown property, or $5.3 million a year, may even be optimistic: Other estimates peg the loss at twice that, or more.
Left unmentioned in the letter are massive property tax refunds the city will owe, as well as fanciful projections of interest income that are inconsistent with the dwindling reserves, and drawing-down of federal COVID relief funds, predicted in the budget itself. That’s another unrealistic $80 million over five years.
Pittsburgh exited Act 47 state oversight after nearly 15 years on Feb. 12, 2018, with a clean bill of fiscal health.
It has already ruined that bill of health.
Act 47 in Pittsburgh
Flashback February 21, 2018: Act 47 in Pittsburgh: What Was Accomplished?
Pittsburgh’s tax structure was a much-complained-about topic leading up to the Act 47 declaration. The year following Pittsburgh’s designation as financially distressed under Act 47 it levied taxes on real estate, real estate transfers, parking, earned income, business gross receipts (business privilege and mercantile), occupational privilege and amusements. The General Assembly enacted tax reforms in 2004 giving the city authority to levy a payroll preparation tax in exchange for the immediate elimination of the mercantile tax and the phase out of the business privilege tax. The tax reforms increased the amount of the occupational privilege tax from $10 to $52 (this is today known as the local services tax and all municipalities outside of Philadelphia levy it and could raise it thanks to the change for Pittsburgh).
The coordinators recommended an increase in the deed transfer tax, which occurred in late 2004 (it was just increased again by City Council) and in the real estate tax, which increased in 2015.
Legacy costs, principally debt and underfunded pensions, were the primary focus of the 2009 amended recovery plan. The city’s pension funded ratio has increased significantly from where it stood a decade ago, rising from the mid-30 percent range to over 60 percent at last measurement.
The obvious question? Will the city stick to the steps taken to improve financially and avoid slipping back into distressed status? If Pittsburgh once stood “on the precipice of full-blown crisis,” as described in the first recovery plan, hopefully it won’t return to that position.
The Obvious Question
I could have answered the 2018 obvious question with the obvious answer. Hell no.
No matter how much you raise taxes, it will never be enough because public unions will suck every penny and want more.
On top of union graft, and insanely woke policies in California, we have an additional huge problem.
Hybrid Work Leaves Offices Empty and Building Owners Reeling
Hybrid work has put office building owners in a bind and could pose a risk to banks. Landlords are now confronting the fact that some of their office buildings have become obsolete, if not worthless.
Meanwhile, in Illinois …
Chicago Teachers’ Union Seeks $50 Billion Despite $700 Million City Deficit
Please note the Chicago Teachers’ Union Seeks $50 Billion Despite $700 Million City Deficit
The CTU wants to raise taxes across the board, especially targeting real estate.
My suggestion, get the hell out...
International
A popular vacation destination is about to get much more expensive
The entry fee to this destination known for its fauna has been unchanged since 1998.
When visiting certain islands and other remote parts of the world, travelers need to be prepared to pay more than just the plane ticket and accommodation costs.
Particularly for smaller places grappling with overtourism, local governments will often introduce "tourist taxes" to go toward things like reversing ecological degradation and keeping popular attractions clean and safe.
Related: A popular European city is introducing the highest 'tourist tax' yet
Located 900 kilometers off the coast of Ecuador and often associated with the many species of giant turtles who call it home, the Galápagos Islands are not easy to get to (visitors from the U.S. often pass through Quito and then get on a charter flight to the islands) but are often a dream destination for those interested in seeing rare animal species in an unspoiled environment.
This is how much you'll have to pay to visit the Galápagos Islands
While local authorities have been charging a $100 USD entry fee for all visitors to the islands since 1998, Ecuador's Ministry of Tourism announced that this number would rise to $200 for adults starting from August 1, 2024.
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According to the local tourism board, the increase has been prompted by the fact that record numbers of visitors since the pandemic have started taking a toll on the local environment. The islands are home to just 30,000 people but have been seeing nearly 300,000 visitors each year.
"It is our collective responsibility to protect and preserve this unparalleled ecosystem for future generations," Ecuador's Minister of Tourism Niels Olsen said in a statement. "The adjustment in the entry fee, the first in 26 years, is a necessary measure to ensure that tourism in the Galápagos remains sustainable and mutually beneficial to both the environment and our local communities."
These are the other countries which are raising (or adding) their tourist taxes
While the $200 applies to most international adult arrivals, there are some exceptions that can make one eligible for a lower rate. Adult citizens of the countries that make up the South American treaty bloc Mercosur will pay a $100 fee while children from any country will also get a discounted rate that is currently set at $50. Children under the age of two will continue to get free access.
In recent years, multiple countries and destinations have either raised or introduced new taxes for visitors. Thailand recently started charging all international visitors between 150 and 300 baht (up to $9 USD) that are put toward a sustainability budget while the Italian city of Venice is running a test in which it charges those coming into the city during the most popular summer weekends five euros.
Places such as Bali, the Maldives and New Zealand have been charging international arrivals a fee for years while Iceland's Prime Minister Katrín Jakobsdóttir hinted at plans to introduce something similar at the United Nations Climate Ambition Summit in 2023.
"Tourism has really grown exponentially in Iceland in the last decade and that obviously is not just creating effects on the climate," Jakobsdóttir told a Bloomberg reporter. "Most of our guests visit our unspoiled nature and obviously that creates a pressure."
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