Stretching Your Dollar: The State of NFTs

<div class="block">Today, we&#39;re celebrating National NFT day. While the hype around non-fungible tokens has simmered down since the early days, there is still interest in the digital currency. Brady Dale, reporter at Axios, joined &#39;Stretching Your Dollar&#39; to talk about the state of the NFT space as it experiences a two year lul in sales. </div>
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Stretching Your Dollar

Digital ownership of brands and objects was all the rage back in 2021. But while the hype has died down in recent times, people are still curious about this type of investment here to talk to us about non fungible tokens or NFTS. And how to navigate the hype around new asset classes is a reporter, Brady, Dale Brady. Welcome to the show. Thanks for having me. Great to be here. We love to have you. So according to the block and FT sales are at a two year low, what's driving the decline? Well, you know, the NFT boom of 2021 was driven by a few things. It was, you know, pandemic stimulus, the waning days of zero interest rate policy and a lot of people with a ton of time on their hands at home. Uh So all of those things have ended. We're in a different world now than we were. And you know, the the wheels have come off the broader macroeconomy and that's hurt all of Cryptocurrency as well. You know, people are not making wild bets on strange new corners of the economy. So that's the, you know, that's what's really pulled it back. It's worth noting, however, that volumes on NFTS are still around where they were when the boom started in 2021. Like when people first heard the term non fungible token volumes are around there, there's still collections that sell for, you know, $50,000 per token. So it's not like it's dead. It's just, uh, it is just way, way lower than it was. What should people do when I hear this a lot if they bought an NFT, but now it's not worth as much or nothing at all. Well, they just, they definitely shouldn't sell it. I mean, it's fairly, even worth the trouble to sell it. Selling NFTES, the liquidity in that market is, is really low. It's, it's not an easy thing to do. It's not quick. Um, it'll cost them in gas so they should just hold on to it. And, you know, in the crypto world there's a lot of people say that some of the best investments that they've ever made came from just forgetting that they had some for a long time. So I would say, you know, you might as well just hold on to it. Don't lose your keys to the wallet. You've got it in and, you know, maybe the market comes back and then it's, it's worth more when that happens. That that really could be the case. But there's almost no point in selling Old Nfts at this point. And at the start of the NFT craze and we talked about this, people were buying them without knowing much about them. So how do consumers navigate the hype around new products? Well, I think, you know, having been through a couple of crypto boom cycles, the thing that I see happens a lot is people convince themselves that they really have conviction about the market. They're like, no, no, no, I'm not just buying this to make money. I'm, I'm buying it because I really believe and they put too much money in and then the bottom falls out of the market because these things tend to fool follow boom and bust cycles and it turns out they didn't actually believe they're just mad that they lost a lot of money. So I think people need to watch themselves. Um and they need to understand that, you know, there's certain kinds of investments that are investments, those are things that we all understand have been around a long time. And there's some things in NFTS and Cryptocurrency at this point are in this category that are pure speculation. And if you can afford to speculate, you know, that's fine. You have that latitude but don't think of it as an investment, it should be a tiny piece of your portfolio. Um You should mostly invest in things you can count on over time and yeah, a speculation might really pay off and you might be mad later that you didn't put more money into it. But odds are, it's not going to pay off and you'll probably be glad you didn't over invest pretty. What are the red flags to look out for when looking to invest in new products? Well, I mean, there's a ton of things out there. I think a few things are, are credible people supporting whatever it is. You know, people who have a track record out there that you can believe in. That's a big thing. I think in the Cryptocurrency world, one thing that we see a lot of times are folks who are promising job organic gains. The truth is the crypto products that, you know, aren't shady. Usually don't really talk about gains a lot. They talk about actually generating something that people can really want in the world. Um in the NFT world. Usually they're trying to build a community. So you should look for signs of uh uh communities that are really strong that are doing things together that actually have ideas um are generating content around the NF DS. You know, that that's the sort of thing to look for is, is positive there. But, but big promises I think are always a bad sign and you follow this very closely, obviously, what do you think the next big investment craze will be here, Brady? Well, I don't know, you know, I want one thing I wanna say about NFTS is, you know, uh like I said, it's not dead. And there is an exciting fight that's going on in the NFT world right now. You know, I'm reporting this uh from the main net conference here in New York City and a lot of people here are still excited about NFTS. And one of the things they're watching is uh this battle that's happening over who's gonna be the ebay for NFTS. You know, the market leader is open sea, but this other marketplace blur has come along and tons of people are using blur as well. You know, it has a, it has a ton of volume on it. So I, so clearly, there are people who believe that this space is gonna make a comeback, you know, beyond that, the thing I know is Cryptocurrency. Um My thesis on Cryptocurrency is that uh there will be another big moment, something else will come along. It'll, it'll go up in value a lot like it has before and it'll probably be another crash. And then after that, it'll probably just sort of be integrated into the normal economy. It's gonna become, it's gonna become boring after that. So that's what to look forward to look forward to boringness and crypto one of these days after, after the next wild run. All right, noted before I let you go. Any last tips for people interested in investment trends and of course, NFTS. Uh well, I guess in NFT si would just say, you know, folks should especially at this point, you shouldn't get into anything in this space unless you genuinely like it. You know, these are supposed to be artworks, these are artworks that are often keys to certain communities. And so that's the reason to get and on one of these things is because it, it drives joy for you in some way. So I guess that's my big advice. And NFTS don't, don't do them now, especially for the money, do them because they open up some kind of experience that you actually appreciate. All right, great advice. Our thanks to AXIOS reporter, Brady Dale. Thank you, Brady.