As Coinbase Moves Into NFT Space, Even Jim Cramer Changes Tune

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Watch this: in April, CNBC Mad Mon­ey host Jim Cramer said peo­ple buy­ing non-fun­gi­ble tokens (NFT) are buy­ing things that don’t exist. “We have peo­ple try­ing to put prices on things that did­n’t exist — think non-fun­gi­ble tokens,” he said in April. He wasn’t say­ing don’t invest in them, but he was equat­ing them with bub­bles bound to pop.

On Octo­ber 12, Coin­base, one of the biggest cryp­tocur­ren­cy exchanges used by retail investors, said it would add an NFT mar­ket­place to its plat­form.  And so two weeks lat­er, on Octo­ber 28, Cramer said he was bet­ting on the rough­ly $10 bil­lion NFT mar­ket by buy­ing Ether tokens.

“In all hon­esty, I was gam­bling,” Cramer said. “I was sim­ply gam­bling on crowd psy­chol­o­gy. I have no idea what­so­ev­er why these things went up.”

Jim, CrAmer­i­ca are all cryp­to gam­blers now.

Like the guys sell­ing strange tokens in a bar in Tatooine in the Star Wars uni­verse, we are all play­ing with these odd­ball chips, most of them only hav­ing val­ue in one bar. No one knows why they go up. 

I own Enjin coin as a play on NFTs. I have no idea why it’s been up 10% in the last week. Coinbase’s announce­ment hap­pened over two weeks ago.

“The future has no gate­keep­ers,” says Tom Hale, founder & CEO of new decen­tral­ized NFT plat­form, Mel­on. “It’s an open future where cre­ators, brands, and fans con­nect direct­ly. We see a future where brand-cre­ator col­lab­o­ra­tions and cre­ator-to-fan rela­tion­ships take place direct­ly on a decen­tral­ized web. That’s a future with more pow­er for con­tent cre­ators and their fans,” he tells me. 

Maybe this is why Enjin is up. Peo­ple are see­ing the future more clearly. 

In short, NFTs are dig­i­tal art­works, audio clips, video clips. They are priced in cryp­to. Some­times they are priced in fiat. It’s a new world. We’re all just wrap­ping our heads around it. 

Even stars of the invest­ing world, like Cramer him­self, can­not tru­ly explain it oth­er than an NFT is some­thing for gamers pur­chas­ing to use in a par­tic­u­lar game, usu­al­ly on the blockchain, not on the X Box. It’s also dig­i­tal art you – I sup­pose – don’t hang on your wall. Then again, NFTs are mov­ing beyond art, and audio-visu­al clips.

This year we have seen sales of Jack Dorsey’s first Tweet, and in March, TikTok’s own NFT exper­i­ment saw a sale of over $500,000. (I don’t get it. Who is spend­ing that kind of mon­ey on this nonsense?)

Exchanges like Coin­base and mar­ket­places like Mel­on are build­ing on this new market. 

Hale names some social media stars that will work with Mel­on to cre­ate trad­able NFTs:  Swag­boyQ, Liane V, and Tim Chan­tarang­su, once known as Tim­o­thy DeLaGhet­to. They have tens of mil­lions of fol­low­ers. Except for me. I have no idea who these peo­ple are. But imag­ine if they made an NFT? Per­haps it would be a mon­ey maker. 

Coin­base Joins the Chorus

Coin­base expand­ing its foot­print in NFTs should come as no sur­prise, as NFTs are reach­ing main­stream audi­ences. It’s total­ly stolen DeFi’s thunder. 

Coin­base announce­ment marks anoth­er step for­ward for NFT cre­ators because Coin­base is the de fac­to on-ramp for most retail cryp­to investors.

Coin­base also has an oppor­tu­ni­ty to lead the charge in expand­ing beyond Ethereum, the main blockchain for NFTs for now. Oth­ers are eat­ing into Ethereum’s mar­ket share. Users have embraced a mul­ti-chain future, and venues like Coin­base can align with that to max­i­mal­ly ben­e­fit their cus­tomers, thinks John Wu, Pres­i­dent of Ava Labs, a team sup­port­ing devel­op­ment of the Avalanche blockchain.

Coin­base is not the first exchange to hop on the NFT bandwagon. 

If you watched any base­ball this year, and sure­ly the play­offs, you saw umpire’s with the logo for FTX on their shirts. FTX is a cryp­to exchange. They sell NFTs as well. They hope to be the place where MLB play­ers put up per­son­al items for sale as NFTs. 

On Octo­ber 26, for­mer Boston Red Sox slug­ger and World Series cham­pi­on David Ortiz signed a deal with FTX. Sure­ly he’ll have some­one cre­ate “Big Papi” NFTs for FTX, just like Tom Brady.

Last year, a Brook­lyn start-up called Voice launched a plat­form for cre­ators to make and sell their own dig­i­tal art. Voice is being billed as a cheap­er alter­na­tive to Ethereum. They have joined oth­er mar­ket­places, like Mel­on and ear­ly entrant OpenSea.

Why Invest, Where to Invest, What’s Next?

Why invest?

Because dig­i­tal assets are the new stock exchange and every­one, even the pros, are diver­si­fy­ing into these assets. You can get in with a hun­dred bucks, and let it ride. 

Think about what a $100 in Bit­coin would have been back when it was $15 a coin. That’s why you invest in this space. That’s why every­one invests in the cryp­to uni­verse. NFT is the newest plan­et to form there.

Where to invest?

Wu thinks that a mix of invest­ing in NFT col­lectibles and the blockchains that sup­port them is “a sound strategy.” 

“An ana­log to the tra­di­tion­al world would be invest­ing in both Sothe­bys, and the art they han­dle for clients,” he says. 

As a cryp­tocur­ren­cy investor, I’d rather invest in a project that sup­ports NFT sales (like Enjin), rather than try my lucky at buy­ing the first piece of dig­i­tal real estate cre­at­ed by a video game I’ve nev­er heard of, let alone spent five hours a day playing. 

Think­ing like a seri­ous investor for a moment, I asked Wu where he would invest if he want­ed to invest in the NFT space.

He said it would be a “clean” invest­ment the­sis to “buy into projects that focus sole­ly on NFTs.” But the util­i­ty of NFTs can, and will, go beyond art and col­lectibles. (There’s a project now sell­ing wines, NFT-style.) 

Here they are:

“We’re build­ing our own NFT mar­ket plat­form for our own ENO Token because we see an oppor­tu­ni­ty for cre­at­ing a mar­ket­place for wine col­lec­tors that can use an NFT,” says David Mar­quez, blockchain mar­ket­ing advi­sor to ENO, a project billed as a “decen­tral­ized wine move­ment to con­nect and spread wine cul­ture around the world.”

The idea behind their new ENO token is that investors can own a bot­tle of expen­sive wine, but not real­ly take own­er­ship of it for their wine cel­lar. So with ENO, you can cre­ate a dig­i­tal wine cel­lar and if you believe cer­tain wines will increase in val­ue, then you can sell them dig­i­tal­ly. The real bot­tle will just stay in the vine­yard. Maybe you’ll have your name on it. 

Mar­quez has an OpenSea account. “My kids are in a cou­ple of col­lec­tor games like Poke­mon that use NFTs,” he says.

“Projects with NFTs in gam­ing have a strong future because they already have a good use case,” says Fares AT (that’s what he goes by), founder and CEO of the Ghos­pers Game.

He says that investors look­ing for ideas should join Red­dit, Dis­cord and oth­er NFT chat groups for intel. 

“They will see just how many peo­ple love art. The new gen­er­a­tion of art is here. What’s com­ing? I think StarAt­las, Mist, or any Game­fi NFT should be an inter­est­ing invest­ment once they launch. Auro­ry comes to mind, too, due to the teams behind them.”

I’ve come to view NFTs as a mix of dig­i­tal col­lectibles – be it images, or audio-visu­als – and items for pur­chase in these new blockchain-based games (like a StarAt­las) that vary in terms of qual­i­ty and depth of play. 

I guess the newest games would be part of the meta­verse, but I’ll save that for anoth­er time. (Bil­lion­aire Mark Zucker­berg is prob­a­bly onto some­thing again in chang­ing his company’s focus from Face­book to some­thing more rem­i­nis­cent of the SyFy series Capri­ca back in the day.)

“Today we can pur­chase a dig­i­tal piece of art, music or video which has val­ue in and of itself. How­ev­er, imag­ine if we could sell NFT’s to invest into impact projects, offer­ing the oppor­tu­ni­ty for ongo­ing finan­cial and non-finan­cial returns, mak­ing the NFT a liv­ing thing?” says Glen Jor­dan, the co-founder of Empowa. He thinks the func­tion­al­i­ty of NFT’s is only just start­ing to be explored.

Empowa is using NFT as the basis for afford­able home loans in Africa, where some coun­tries will charge upwards of 30% inter­est on mort­gages. Empowa is pow­ered by Car­dano. (I own it! Woohoo!). 

When I look at their web­site, I can’t tell if, like Zucker­berg, they are tru­ly onto some­thing and we are mov­ing into a whole new world; one we don’t quite have the lan­guage for, or the best use cas­es for yet. That’s one hand. On the oth­er hand, I think this is going nowhere. But I am will­ing to bet that view­point is like look­ing at a URL code in the 90s and think­ing that build­ing a busi­ness on the World Wide Web will nev­er fly. It’s just too hard!

Jordan’s idea is that the NFT is ready to break out of arts and enter­tain­ment. A project like Empowa “adds to the val­ue of the NFT and appeals to a much broad­er mar­ket of investors and phil­an­thropists,” he says.

Mean­while, for Coin­base and oth­er cryp­to exchange investors who aren’t ready to buy funky dig­i­tal art, Wu has a warn­ing: investors in plat­forms that don’t sup­port a large num­ber of cryp­to use cas­es like decen­tral­ized finance and NFTs — even the social tokens like what Empowa is after — “will risk los­ing out on the cross-over oppor­tu­ni­ties between these applications.”

Dis­claimer: The author of this arti­cle owns Enjin, Car­dano and Bitcoin.

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