According to the chief strategy officer of digital asset manager CoinShares, the rapidly expanding non-fungible token (NFT) market is not a bubble.
Meltem Demirors highlights to the scarcity of various NFT projects and Bitcoin as a potential primary motivator for investors in a fresh tweetstorm.
“Are NFTs a fad? No. Wealth is a speculative bubble…
For the first time in history, more than one percent of adults worldwide — 56 million millionaires – are millionaires. Their combined net wealth is $158 trillion. There are 21 million Bitcoin in circulation. There are a total of 10,000 Punks. There are a hundred rocks.”
According to Demirors, NFTs are status symbols for a new class of consumers.
She further claims that, unlike traditional luxury products such as bags, watches, and shoes, NFTs can be fractionalized, have shared ownership, and can be used as collateral in on-chain financial markets.
“The global market for luxury goods, i.e. conspicuous spending, is enormous. NFTs are a digital flex/status symbol for a new class of customers, but unlike traditional wealth and status markets, they are open to anybody, everywhere with provable scarcity.”
Demirors also claims that investing millions on NFTs is not an outlandish concept.
“Those who argue that spending millions on JPEGs is stupid and that we should be focusing on world hunger should first contact the people on the traditional art collector list. People are spending $200 million for paint blotches. Spending $2 million on blobs of pixels isn’t any less noble.”
Demirors’ comments come after Visa purchased a Cryptopunk character worth roughly $150,000 at the time of the transaction.
OpenSea, an NFT marketplace, processed only $21 million in transaction volume in 2020, but on August 8th, the platform shattered records with $78.8 million in daily transaction volume.
Despite the industry’s rapid expansion, Demirors says she prefers to embrace NFTs.
“So there are three choices.”
1: take no action
2: accept NFTs, plunge in, and try to study and understand…
3: Just like you derided bitcoin 5 years ago, mock NFTs as a bubble and nothing more than complex money laundering.
“I’ll go with number two.”