NFTs will act as high-end property during boom cycles: Real Vision CEO

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Real Vision CEO and co-founder Raoul Pal believes non­fun­gi­ble tokens (NFTs) will act sim­i­lar to “high-end prop­er­ty” in the tra­di­tion­al econ­o­my, out­per­form­ing Ether (ETH) dur­ing cryp­to mar­ket boom cycles. 

In an hour-long YouTube video pub­lished on Feb. 20, the for­mer JPMor­gan exec­u­tive offered a run-down of what he felt most bull­ish about when it came to NFTs, includ­ing key use cas­es for the asset class, its under­ly­ing tech and its poten­tial per­for­mance rel­a­tive to Ether.

Pal said just as “high-end prop­er­ty” often out­per­forms the mar­ket when the “econ­o­my recov­ers,” the same is like­ly to occur with cer­tain NFTs dur­ing cryp­to boom cycles.

“So I can take my ETH and put it into a JPEG, an NFT. But why? Well, because much like high-end prop­er­ty and think of a [Crypto]Punk as a high-end prop­er­ty in Lon­don or New York or Hong Kong or wher­ev­er it is, when the econ­o­my starts boom­ing and peo­ple have more mon­ey, they tend to buy expen­sive high-end property.”

“And it tends to out­per­form the rest of the mar­ket. And I think the same thing will hap­pen in ETH econ­o­my,” he added. 

He high­light­ed that major col­lec­tions such as Cryp­toP­unks and the Bored Ape Yacht Club (BAYC) have become sta­tus sym­bols in the cryp­to com­mu­ni­ty, much like own­ing a lux­u­ry house, car, or item from a famous brand that offers access to exclu­sive clubs or what he dubbed as “mini network-states.”

He saidthat NFTs serve as a “way of own­ing prop­er­ty in the ETH econ­o­my,” adding: 

“Humans are ridicu­lous and we love to social­ly sig­nal stuff.”

Look­ing back, the for­mer hedge fund man­ag­er said NFTs start­ed to draw his atten­tion in 2022 as he start­ed to “under­stand the pow­er of what they are and what they can do,” such as being able to trans­fer “val­ue” via blockchains and auto­mat­ed smart contracts. 

He also point­ed to NFTs’ uses in the res­o­lu­tion of con­tracts, not­ing that blockchain-based ledgers can offer ver­i­fi­able trans­paren­cy on what has been agreed between peo­ple, while smart con­tracts can essen­tial­ly do away with unnec­es­sary third parties. 

“Now what’s inter­est­ing about the smart con­tract ele­ment of an NFT is the fact that it kind of allows for the set­tle­ment mech­a­nism to be auto­mat­ed in code and resolves with­out the need for a third par­ty so you don’t need the courts, the lawyers, the notaries and the accountants.”

Pal stat­ed that since he got into NFTs, he’s allo­cat­ed rough­ly 10% of his ETH hold­ings into “pre­mi­um NFTs” such as Cryp­toP­unks and BAYC NFT.

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He sug­gest­ed that such col­lec­tions poten­tial­ly offer more upside poten­tial than down­side risk, as they have man­aged to sus­tain a decent lev­el of val­ue dur­ing the bear mar­ket. He also believes the price of ETH is like­ly to increase mov­ing forward. 

“When you look at the price of Cryp­toP­unks and Bored Apes, they’ve remained incred­i­bly sta­ble in ETH terms. Yes, they had a blow-off top and they came back and they’ve trad­ed about 65 ETH for­ev­er. And that’s inter­est­ing to me because they didn’t fall much fur­ther. They had a sharp spike in June in the big cryp­to col­lapse. But oth­er than that, they’ve just ral­lied back and stayed at 65 ETH. So what­ev­er ETH does, they’re just mir­ror­ing it,” he said. 



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