Chris’ note: Stock and crypto prices are falling as investors brace for Fed rate hikes. But as I showed you this week, it’s normal for markets to correct from time to time. And our analysts say the rise in volatility is temporary.
With that in mind, we’ll shine the spotlight today on one of the biggest moneymaking trends of 2022. It’s what our tech and digital assets expert, Jeff Brown, calls “The NFT Moment” – the point when NFTs go mainstream.
He outlined his full investment thesis in a special broadcast last night. He also shared details about three under-the-radar “NFT coins” to play this rapidly growing market. If you missed it, make sure to catch the free replay here. Then read the Q&A below with Jeff and his longtime managing editor, Van Bryan.
You’ll learn why Jeff is excited about this megatrend… and how a major move from Facebook is about to cause the NFT market to explode.
Van: The rise of NFTs was one of the biggest stories last year. And I know you believe we’re on the verge of what you call “The NFT Moment.” It’s the point when NFTs go mainstream… almost overnight. But for newer readers, remind us what an NFT is?
Jeff: NFT stands for non-fungible token. If something is fungible, it means you can easily exchange it with something of the same type. A U.S. dollar is a perfect example.
Let’s say I borrow $1 from you, and you give me a dollar bill. I don’t have to give you the same dollar bill back. Any dollar bill will do. That’s fungibility.
Non-fungible means you can’t easily exchange one thing for something of the same type. A good example is the Mona Lisa.
Imagine I walk into the Louvre Museum in Paris and offer to exchange a copy of the Mona Lisa I bought online for the original painting. They’d think I was crazy.
That’s because the Mona Lisa – and all other original artwork – is non-fungible. It’s unique. You can’t readily exchange or substitute it for another artwork. None would be of precisely the same value.
It’s the same for NFTs. Each is unique.
You confer NFT ownership using a blockchain – the distributed ledger technology that underpins bitcoin (BTC) and other digital assets.
Van: You began making the case for NFTs as a powerful profit trend last year. What did you see in these tokens then?
Jeff: I’d been following the growth of NFTs since 2020. And in March 2021, Glenn Beck invited me on his podcast. There, I predicted NFTs would become a multibillion-dollar market. And that’s what happened.
At the time, the most popular use case for NFTs was as digital collectibles. I saw blockchain tech powering NFTs as the next generation of art and collectibles.
Van: Some NFT artworks have valuations of tens of millions of dollars. What do you say to a skeptic who sees that and thinks it’s crazy?
Everydays: The First 5000 Days by Beeple sold for $69 million last March. Source: Christie’s
Jeff: Well, I’d probably never spend that much on a piece of art. But collectors have been willing to spend like this on art for a long time. The art has just been physical until now.
A lot of people get hung up on the fact that NFT art is digital. But we’re now in a world where investors value digital assets. Bitcoin, a purely digital currency, is a perfect example.
In many ways, digital art is more appealing to collectors. A Picasso painting is hard to show off to friends and colleagues. You risk it getting damaged or destroyed.
But an NFT collectible? It can go everywhere with you. You can share it on social media or display it on your smartphone. It’s even becoming common for celebrities to use their NFTs as their profile pictures on Twitter as a status symbol.
And since the art is digital, you don’t have to worry others will ruin it.
Plus, digital collectibles and artwork are just one application for this tech.
Van: So what’s the bigger picture here?
Jeff: NFT art is part of a larger tech trend called tokenization. The easiest way to think about is to compare it to securitization.
When a company is securitized, the equity value of that company – the value of the business minus its debts – is represented as shares. If you own shares in a company, you own a fraction of that company’s equity.
Tokenization works similarly. It’s a way to substantiate an ownership claim on an asset. The first difference is you do it with blockchain tech. The second is you can tokenize and trade virtually any asset in the world, not just equity in a public corporation.
Van: Can you give a concrete example of how that works?
Jeff: Think of a house. Typically, one person – or a couple – is the sole owner. But if you tokenize a house, you could give fractional ownership to hundreds… even thousands… of partial owners. And the value of the tokens would fluctuate along with the value of the house… just like a stock fluctuates with the value of a company’s equity.
Now imagine tokenizing commercial property, cars, jewelry, or even racehorses. Again, we can tokenize and trade any asset. So I refer to the coming explosion in tokenization as “World IPO Day.”
Tokenized assets – whether they’re digital collectibles or real-world items – aren’t going away. This isn’t a fad. This will be one of the biggest profit opportunities of 2022.
I predict the NFT market will reach a $100 billion valuation in the next 12 months. That’s up from $31 billion today.
Van: So what about the news you reported on recently that Facebook parent Meta is going all in on NFTs?
Jeff: As readers will be aware, Facebook – now called Meta – is the world’s largest social media company. It’s also the sixth-largest company in the U.S. by market value.
And it’s gearing up to launch an NFT marketplace.
This could be a game changer given the reach of Meta’s global social media empire.
Top NFT marketplace OpenSea’s massive success is driving the move. Think of OpenSea as the eBay (EBAY) of NFTs. You go there… browse NFT artworks… and buy them using crypto. It takes a 2.5% cut of every sale.
And OpenSea recently hit a $13 billion valuation in the private market. I’ve been an early stage investor in tech companies for more than two decades. And this is the fastest-growing early stage company I’ve ever seen. OpenSea’s valuation increased 181-fold in less than a year. And it’s on track to generate $850 million in revenue in 2022.
Meta wants a piece of this success. It’s also been busy building key NFT functionality into its digital asset wallet, Novi. Meta owns Facebook, Instagram, and WhatsApp. They have a combined 3.5 billion active users monthly – nearly half the planet. Novi will allow all of them to securely store NFTs.
From there, the next step is to roll out a marketplace where Meta users can buy, sell, and trade NFTs with one another. This would instantly become a major competitor for OpenSea. And it’ll make the NFT market explode. Meta’s reach will take the industry mainstream – as you said, almost overnight.
That’s why I hosted my NFT Moment broadcast last night. I want to spread the word about this massive new tech trend to as many Legacy readers as possible.
More than 23,500 folks tuned in. At the event, I gave a broad overview of this megatrend… and revealed another key event that’ll fuel the mainstream adoption of NFTs. I also shared how attendees can build their stakes… including details about my top recommendations in this space.
Van: What can readers do if they missed your broadcast?
Jeff: They can catch the free replay here for a limited time. As I’ve been saying, we’re moments away from NFTs going mainstream. This is sending a small group of NFT-related cryptos skyrocketing. But many will miss out because they think NFTs are a fad. And I believe that will be the biggest financial mistake of their lives.
So before you dismiss this trend, hear what I said last night and keep an open mind.
Van: Thanks, Jeff.
Jeff: My pleasure. Anytime.