If you have been paying attention to the cryptocurrency market over the past few weeks; there is a trend that is becoming so popular that it may shock you. This trend is the surge in the popularity of NFTs; in particular Crypto Punks. If you are not familiar with Crypto Punks; they are considered the OG of all NFTs, something that started it all. Recently, their value has skyrocketed. There is actually a crypto punk that has bid over 2200 ETH valued at just over $7 million. This is an incredible amount of money that very few people can afford to pay. But that begs the question; which would you rather have Crypto punk NFT or cryptocurrency equivalent?
There is a lot of potential for growth in the NFT market. Because it's a market that's literally just getting started, that means there's plenty of opportunity to get in early, find great gems, and make huge profits. This happens time and time again with the famous Crypto Punk NFTs. They are currently so popular that people have been able to buy them and immediately resell them for a large profit. There have been constant stories of people paying 150 ETH if not more for one of the punks and then being able to sell them for double what they paid a week later. There is a lot of money being made in this market right now. We haven't even begun to see some of the use cases that will come with them in the future. The possibilities are endless. By using in games, licensing people, using in the Metaverse, collecting and more. Imagine getting into Bitcoin in 2011 or getting into Ethereum in 2016. Getting into the right NFTs can have the same potential. Kids growing up today often actually prefer digital over physical, which means this is the future we're heading towards.
But there is a risk. NFTs are not as liquid as cryptocurrency where you can literally sell or buy at any time. You need to find a buyer for your product before you can make money. It was relatively easy at the moment, but this may not be the case in the future. Crypto Punks can always have a huge resale market. As I mentioned, this is the original NFT. But the majority of other NFTs will not share the same fate. With the rate at which the NFT market is increasing and how expensive the items are becoming; it's easy to see that this could be a bubble that's about to pop. Many people will lose a significant amount of money because they cannot find a buyer for their NFT. This is the risk that comes with NFTs. What's hot today may not be tomorrow. Think about all the trends you've seen come and go throughout your life. While I'm still relatively young, some of these trends still come to mind. For example Beanie Babies, Trolls, Pogs and the list goes on and on. When you buy an NFT in the hope of making a profit, you take the risk that you will either never be able to sell it, or that you will do so at a big loss. This means it is an illiquid asset.
Now let's talk about cryptocurrency. It could be argued that there is also a lot of risk that comes along with investing in cryptocurrency and I would mostly agree with that. But there are options available that many would consider much safer, such as Bitcoin or Ethereum. It is generally accepted that Bitcoin will be around ten years from now and worth much more than it is today. The same can be said for ethereum. The big thing about choosing to invest in one of these options over NFTs is how liquid this market is. This means how easy it is to buy and sell off-market. You can sell whenever you want. Not only are they liquid, but there are ways to use these assets and generate additional income. My personal favorites are lending my bitcoins and ethereum for about 5-6% per year. With the way cryptocurrencies appreciate in value every year, that earned interest can quickly turn into a much larger sum. Just like with NFTs, there are many cryptocurrencies that are pure junk and will tend to zero over time.
But which option is better? Let's say you were able to find an absolute steal at a crypto punk price of around 35 ETH, currently worth around $112,000. Today, this is already a lot of money. My expectations may be wrong, but I expect Ethereum to reach $10,000 before the end of the year. That would make this crypto punk buy now $350,000. And that's just this year. With a few years of credit or staking and even higher value, you could quickly be looking at a $ 500,000 – $ 1,000,000 spend opportunity. All about JPEG. With that money, you could potentially buy your dream home and have a nice cornerstone for your retirement fund. When you start thinking about it that way, this crypto punk gets even more expensive. But we have to mention again that this NFT market is really developing. Just this week, Visa officially bought Punk as well. This will only lead to more accumulation and greater appreciation of value. As for crypto punks; this is quickly becoming a market in which only the elite can participate. Yes, there will always be cheaper NFTs available, and you might get lucky and pick one that appreciates in value significantly. But compared to blue chip NFT, Crypto Punks and blue chip crypto, bitcoin and ethereum. Which would you prefer? and you might get lucky and pick one that appreciates the value a lot. But compared to blue chip NFT, Crypto Punks and blue chip crypto, bitcoin and ethereum. Which would you prefer? and you might get lucky and pick one that appreciates the value a lot. But compared to blue chip NFT, Crypto Punks and blue chip crypto, bitcoin and ethereum. Which would you prefer?
For me personally I would prefer bitcoin or ethereum. I think crypto punks will probably always have value, but I'm still not convinced it's not a bubble and how far they can go back. I have much more faith in Bitcoin and Ethereum and prefer to hold them. I find solace in the fact that it is much more liquid and also in using it to earn even more additional income. I believe that investing in cryptocurrency is already risky enough and investing large funds in NFTs and even crypto punks multiplies that risk at least twenty times. And so I choose the safer path, the one in which I feel more confident. All this knowing that I could be missing out on potentially huge profits.
What about you? Which would you prefer? A highly valued NFT or your favorite cryptocurrency?! And why!?