The secondary market for NFTs is still in its infancy, but investors are rushing to get their foot in the door, banking on a major payoff in the next few years. What’s their strategy?
Victoria Zavyalova
Rare NFTs are a good bet for investors, and shared ownership lets anyone tap into the bluechip digital assets, according to the founders of Meta4 Capital. This investment fund is focusing on historical NFTs that are innovative and extremely scarce.
“Right now we’re transitioning into Web3: our centralized world, dominated by ‘big tech,’ will be gone one day,” said Brandon Buchanan, managing partner and co-founder of Meta4 Capital. “Rare historical NFTs, like Bored Ape or CryptoPunks, are becoming symbols of this shift. The collection we invested in is like the Egyptian pyramid before the skyscraper.”
Bored Ape Yacht Club generated $311 million in secondary sales last month, an increase of over 100% since December, according to CryptoSlam. When the collection hit the market in April 2021, starting prices for Bored Ape NFTs were listed at around $300. Today, it’s hard to find a piece for less than $100,000.
Tapping into the opportunity
There’s already a very robust secondary market for rare collectibles, Buchanan believes. “People think NFTs aren’t liquid, but you’re dealing with a very liquid market,” he said. How can individual investors tap into rare collectibles?
In the future, fractional ownership of NFT will enable thousands of people to invest in rare pieces worth millions of dollars, even if they don’t have much investment capital themselves. The decentralized nature of the blockchain will have an impact on investments, believes Buchanan.
“I think we’re gonna see a lot of different models disrupting traditional venture capital. Whatever marketplaces emerge now, they will make it easier for you to own rare NFTs, pieces of digital history, and other digital assets. I would want people from Africa to Europe, from America to Asia to participate and access what we’re doing.”
New risks and growth points
The crypto market is a microcosm of a larger market. “Worldwide we’re dealing with several years of the pandemic’s cumulative effects: supply chain constraint, fears of inflation, and new variants,” he said. “This brings a lot of uncertainty: scarcity and inflation are driving up prices.”
Rare historical NFTs are hard to find: thousands of users are holding pieces worth millions of dollars. Seeking out new, “undiscovered” projects — which could become the next “Bored Ape” or “CryptoPunk”—is worthwhile but risky. Lack of regulation and compliance in the NFT space, too, has opened up new avenues for scammers.
Active community on Twitter and Discord is one of the benchmarks that shows a project is serious about building their brand. “If I was new to the space, I’d be looking at Metaverse-related investments,” Buchanan said. “I think the virtual world is interesting, too. There are a lot of implications, from advertisements to any kind of solutions recreating the world.”
With their NFT collection, Meta4Capital is also trying to “recreate the world,” or the history of Metaverse in the making. “Years from now we’ll be like: man, how did we even get here?” Buchanan said. “With our collection, we’re basically giving a study on what was happening from 2014 till now.”
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