Mike Novogratz, CEO of Galaxy Digital, stated on CNBC’s Market Alert that the recent surge in popularity of non-fungible tokens (NFTs) indicates a significant cultural shift.
When questioned if Visa’s recent CryptoPunk acquisition represented anything for the industry or was just symbolic, Novogratz replied that the rapid price movements seen in many popular NFTs are a result of individuals becoming overly excited at the start of a new market trend.
He believes, however, that the hype will do little to delegitimize the sector.
NFTs are a form of token that is used to symbolize ownership of various unique goods, such as art and collectibles, music, and real estate. The tokens are protected and authenticated by the blockchain network on which they are issued, and they can only have one owner at a time, making them scarce and precious.
According to Novogratz, NFTs are a viable industry.
The meteoric surge in popularity of NFTs in recent months appears to be second only to the industry’s ICO mania in 2017. The entry of global financial behemoths such as Visa into the area with NFT purchases has fuelled the fire surrounding the new asset class, prompting many to wonder when the NFT bubble would burst.
Novogratz, on the other hand, believes that this is “natural excitement” at the start of any new market trend and that NFTs are here to stay. He utilized The Fidenza #313, an NFT designed by artist Tyler Hobbs that just sold for 1,000 ETH, to demonstrate the enormous price jumps that NFTs endure. The artwork, which is currently worth more than $3.3 million, could have been purchased for less than $4,000 just a few months ago.
“When Jay-Z put his crypto punk as his Twitter avatar–one of the kings of culture says I’m going to use a #NFT as my avatar. It should have told everybody to buy #cryptopunks,” says @novogratz. “This is a shift culture and I think it is a big, big deal.” pic.twitter.com/oK8w0frQ0n
— Squawk Box (@SquawkCNBC) August 25, 2021
“I believe 15% of total art sales this year were NFTs,” Novogratz remarked in an interview. “That sounds like a lot considering the market didn’t even exist four months ago. However, the inflated costs do not imply that this is not a legitimate industry,” he continued.
The Galaxy Digital CEO stated that rapper Jay Z, who just changed his Twitter avatar to a Crypto Punk NFT he purchased, was a clear indication of the industry’s enduring power.
“One culture says, ‘I’m going to utilize an NFT as my avatar.'” It should have advised everyone to purchase Crypto Punks,” he stated.
“This is a cultural shift, and I believe it is significant.”