The One Sector of Crypto That Will Outperform Everything...Including Bitcoin and Ethereum
Not only will this sector outperform the market over time but its also the safest place to park your money
If the past is any indication of what may play out in the next crypto cycle, we can look to history for answers on where to put our money for outsized returns. While the rising tide of liquidity in the next cycle will lift all boats some will surely go farther and faster than most.
Looking back to the crypto crash of 2018 we can learn a few things from what transpired. From the 2018 to 2020 period most thought crypto to be dead in the water. Few people were aware of the new innovations in the space.
Technology like Defi exploded onto the scene and made millionaires overnight. It was one of the easiest money making opportunities in history for those in the know.
There was a time in 2017 known as Defi Summer where people were earning yield on their tokens to the tune of hundreds of percent. It was a clear bubble that ended in heartbreak for those left holding the bag.
But it was not the end of Defi. In fact it was just the tip of the ice berg. While there would not be a repeat of Defi summer in 2021, defi did become a major backbone of crypto. Those that knew about defi and continued to build and invest in the space made a fortune in the renewed bull market of 2021.
Similarly to defi summer in 2018, we had NFT summer in 2021. It was once again the money making opportunity of a lifetime. People minted NFTs for free and saw their valuations explode overnight. Another new technology with even more real world application that would end in despair most holders.
The extent of NFTs applications is yet to be realized but it is far and wide ranging. They will likely be used for event passes, real estate transactions, online identity and many more applications that have not even been thought of yet. However, there is one particular segment of NFTs that is quietly outperforming the entire crypto market. NFT Art.
Historically, we know that fine art is an asset class that tends to only grow in value over time. Similar to the best real estate in the world you will never see steeply discounted prices on fine art.
The reason NFTs, and in particular Generative/AI art will outperform the entire market over time is simple. It’s not about the value they create or bring to the marketplace, cause there is none. It’s about pure human psychology. The same psychology that makes a Monet, Van Goh, or Da Vinci painting worth millions of dollars is the same human nature that will make Generative and AI art outrageously valuable.
Many projects were able to reach seemingly extreme valuations last cycle, but I believe those highest sales will pale in comparison to what we may see in 2024-2025. Don’t be shocked to see multiple 8 figure sales in the NFT art space.
If you were buying NFT art in late 2020 or early 2021 you were likely outperformed by a wide margin. During early 2021 the scene was extremely opaque and only a few savvy investors and art collectors were aware of the potential. Many of these projects went from free mints in early January to 7 figure valuations by the end of the summer.
Something similar will take place over the next few months where people buying and staying up to date may just be minting the next great piece. Even in this bear market we have not only seen the relative strength of art but also many new projects reach 10s of thousands of dollars in valuation. If this is happening in a low liquidity down market, I can only imagine what will transpire when NFT’s are all over the news again. And trust me they will be.
But you’re not an art collector and you don’t know anything about art I get it. However, this is a land grab. Its like the expansion of the US in the 1800’s. You could move out west with all this new land and stake your claim on it for pennies on the dollar. That is what is happening with NFT art today. What is now worth less that a few Eth could be a grail piece in 5 to 10 years. So, even if you’re not an art collector this is an area worth speculating in if you have some money to put to work in risk assets.
There’s a lot to digest when diving into this area of NFTs but I think I can give you a good starting point for reasonably priced NFT Art. There are a few platforms that have built a good reputation for attracting quality artist. Many of the collections you will find here will already be out of your price range but I can almost guarantee there are diamonds in the rough on the platforms that will be highly sought after.