NFT stocks to watch in 2022? NFTs, NFTs, NFTs, everyone seems to be talking about them right now. Celebrities like Eminem, Paris Hilton, and Justin Bieber have all publicly flaunted their NFT investments. Are these legitimate investments or are they just digital images we can use as our avatars? NFT stands for Non-Fungible Token, and are digital assets that are linked directly to their specific blockchain. This provides a unique authentication for each NFT, which is why they have become so popular in the collectibles market. So what are the NFT stocks to watch in 2022?
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Are NFTs the Same as Cryptocurrencies?
This is a common question I receive, and it’s understandable why people would get them confused. They are both built upon blockchain technology, which means there is an exact history of them built into the digital ledger.
Today, most NFTs are built upon the Ethereum blockchain, although other networks like Solana have been gaining popularity.
As investors, how can we attack the hyper-popularity of the NFT market? We should always be aware of companies that might be involved in secular trends. Are NFTs here to stay?
That remains to be seen. The investment firm, Jeffries, believes that the NFT market will be worth upwards of $80 billion by the year 2025. With mainstream companies and big money flowing into the industry, it is certainly adding another layer of legitimacy.
Now, if you are bullish on NFTs and believe they will stick around you can always invest in Ethereum. Despite mainstream adoption, a lot of investors are still hesitant to invest in cryptocurrencies.
Totally understandable. If you have a higher risk tolerance, you can even invest in the NFTs themselves. Here are a few of the more well-known NFT collections to check out if this is an option you are considering! So what are the NFT stocks to watch in 2022?
Bored Ape Yacht Club (BAYC)
The most popular collection of NFTs on the market right now. Bored Ape Yacht Club is a collection of 10,000 different avatars built on the Ethereum blockchain. The floor price for a BAYC NFT just hit 100 Ether, or roughly $200,000. Some believe the collection is worth over $1 billion in total. Bored Ape Yacht Club is the most popular, but it also receives criticism for its inflated prices. In September of 2021, a Sotheby’s auction sold 101 BAYC NFTs for a whopping $24.4 million USD. If there is one line of NFTs that is considered the premier collection, this is it.
Cryptopunks
Cryptopunks predates the NFT craze and is one of the original NFT collections. Compared to BAYC, the Cryptopunks are much more pixelated, but it does add to the charm of the collection. This project was launched back in 2017, with the most expensive Cryptopunk selling at Sotheby’s for $11.75 million. The collection was inspired by the cyberpunk movement in music that was made popular by artists like Daft Punk.
NBA Top Shot
Here’s something a little bit more affordable for the sports fans out there. NBA Top Shot took the sports collectibles world by storm last year. The collection is created by Vancouver-based Dapper Labs, and is an official product of the NBA. It sells for much cheaper than BAYC or Cryptopunks, although rarer NFTs of popular players like Lebron James or Steph Curry can hit the six figures. Dapper Labs is also in the process of creating an NFT collection for both the UFC and NFL as well.
What Are The Best NFT Stocks To Watch?
Okay, so maybe buying actual NFTs isn’t an affordable proposition for most investors. Well, for the rest of us, there are plenty of publicly traded companies that we can invest in to get exposure to the NFT markets. Remember, NFTs aren’t exclusive to the collectibles industry. There will be plenty of use cases for NFTs that still haven’t been realized yet. The industry is still in its infancy, which is why it is so important to invest in these companies before the trend really gains popularity.
Block (NYSE: SQ)
New company name, same determination for widespread adoption of cryptocurrencies and blockchain technology. Block’s CEO Jack Dorsey has been a long-time supporter of everything crypto and blockchain. He famously made his first-ever tweet into an NFT that sold for $2.9 million. Dorsey has also mentioned that Block will be looking at getting into Bitcoin mining as part of its new focus. Is this a calculated risk? Block’s stock has tumbled since the name change and it seems as though investors are weary about a shift to cryptos. Block still has its strong products including the Cash App and its small business payments system. With its acquisition of Tidal last year, don’t be surprised if Dorsey gets Block into the music NFT space as well.
eBay (NASDAQ: EBAY)
Is this for real? The old auction website that is best known for selling PayPal (NASDAQ: PYPL) at ridiculously undervalue? That’s right, eBay has recently utilized its marketplace infrastructure to create a site dedicated to selling NFTs.
eBay is allowing trusted sellers to sell authenticated NFTs of things like music, collectibles, and sports memorabilia. The company is also rumored to soon be accepting cryptocurrencies as payments as well.
eBay has lost popularity over the years but the management team is clearly still trying to maintain relevance. Moving into the world of NFTs and cryptocurrencies could accomplish that. As for the stock, it’s seen better days although it has weathered the tech weakness that has hit this market so far this year.
Dolphin Entertainment (NASDAQ: DLPN)
Count this stock under the highly speculative category. If you haven’t heard of Dolphin Entertainment before, you’re not alone. This small-cap stock has a market cap of only $63 million, and is more like a meme stock than a strong, profitable business. But Dolphin is teaming up with a crypto heavyweight FTX to launch an NFT marketplace. The site will have a heavy emphasis on sports memorabilia NFTs, something that Dolphin has some experience in. There are also talks of integrating the eSports industry in the future. Again, a very speculative stock to watch, but one worth keeping tabs on for now.
Shopify (NYSE: SHOP)
The Canadian eCommerce giant recently got into the NFT industry in a big way. The site now offers the Shopify NFT Beta Program which allows US-based users to create and sell NFTs. If you have a storefront with Shopify, you can begin minting and selling your very own NFTs. This Beta program provides users with the ability to mint on various blockchain protocols including Ethereum, Polygon, Near, and Flow. It’s just another feather in the cap for what has been one of the darling growth stocks of the past few years.
Cloudflare (NYSE: NET)
Cloud computing company Cloudflare is also diving into the NFT game. The company’s Cloudflare Stream platform allows users to embed videos directly into any site. With the recent ERC-721 token API that Cloudflare added, the creator industry just got a major new tool.
I’ll spare you all of the technology behind it, but this will basically allow creators to mint their videos into unique and authentic NFTs. What does this mean? Anytime the video is used on a different site, the creator has a chance to earn royalties off of it. It’s setting up for the future of the creator space and the introduction of Web3.0. Cloudflare isn’t a name you would usually associate with NFTs, but its platform is doing a lot to reward creators in the future.
NFTs: Legitimate Industry or a Bubble?
There you have it on NFT stock to watch in 2022. It really is hard to say since the industry is still so new. Mainstream adoption by some of the biggest companies in the world certainly helps its legitimacy. The future of NFTs likely lies somewhere outside of collectibles and digital art.
There are so many use cases for NFTs that haven’t even been explored yet, it’s hard to discredit the industry so soon. We are really just at the tip of the iceberg, and things are really starting to get interesting.
Recently, major music festival Coachella announced it would be issuing tickets in the form of an NFT. This would cut down on counterfeit tickets as well as scalping or reselling. The world of GameFi, or gamified finance is integrating NFTs as investments for players of the games. Popular games like DeFi Kingdoms and Axie Infinity allow players to buy NFTs and use them directly in the game.
So are NFTs here to stay? I am betting that they are. Again, NFTs won’t always be digital pictures of apes that we use as our avatars. But the legitimacy of collectibles and digital authentication is turning into a legitimate market. Follow the smart money. There are a lot of institutions and investors that are paying big bucks to get exposure to NFTs. For the rest of us, we can buy shares of great companies that are invested in NFTs and hold them for the long term.
