Jay-Z is doing it. So are Quavo and Lil Baby. And Jack Harlow too. Hip-hop is going crazy for NFTs. In a genre where securing the bag is a way of life, it's no surprise that the richest rappers are staking a claim in the NFT gold rush. But before you spend even 1 Ethereum (currently $4,089.82), let's break down why everyone is betting on Crypto Punks, Bored Apes and digital art that looks like it was made in Microsoft Paint— and why you should...or maybe save your coins.
Before we get into it, let's get the disclaimer out of the way: This is not financial advice. Do your own research. NFTs are very risky. And for the love of God, please don't spend money like you're a rapper on the Forbes list unless you're a rapper on the Forbes list.
Okay, so I'm going to assume that you already know the basics; you know what a NFT is and you're already familiar with terms like "minting" and "blockchain" and "floor price". If not, STOP. Go read up right now. NFT For Dummies is a great place to start. Personally, I spent several days just reading, watching YouTube videos, hanging out in Discord channels and lurking on crypto Twitter before buying anything. I literally got off a Twitter Spaces with Gary Vee and Shaq before typing this. It's a brave new world and you need to constantly learn because the information changes by the minute. I suggest you put in the time before catching vibes.
Now that I've spent my own time (and hard-earned money) in the space, I'm going to share why I think that NFTs are a good investment, or at least, something to have on your radar as we head into 2022.
NFTs Are Fun: That's it. It's fun. If you are a collector of any kind—sports trading cards, coins, vinyl, comic books, handbags, Beanie Babies—you know the joy of discovery and collecting. NFTs are a digital version of that. And just like collecting things and sometimes those assets go up in value. But for true collectors, that's not really even the point. It's the rush of searching, being the first or just having the rare/coveted item. That's it. We're all just big kids at heart.
Let's Be Friends: Once you get into this world, you see that it has its own lingo. People are proud to be NFT holders. PFP! Discord and Twitter are the main platforms people connect on to talk NFTs. You'll see people sharing about everything from investing to career advice and mental health. And just like chat rooms and message boards in the '90s, there are people making real social connections. GM! Multiply this by the fact that we're still in a pandemic and socially-distanced, and you can see the appeal of having a community of likeminded people.
Do It For The Culture: What's life without vibes? The Bored Ape Yacht Club (which currently has a floor price of 59 Ethereum or $241042.73) is one of the strongest NFTs because of the culture they're building. With holders like Jimmy Fallon, Steph Curry and Post Malone, it's the bro club that bros want to be a part of. The holders descended onto NYC a few months ago for Ape Fest 2021, a weeklong frat rager that included a yacht party, private concert by the Strokes, stand-up comedy with Chris Rock and hanging with art VIPs like Beeple. For some people, partying with cool kids may be the entire incentive (See: Fyre Fest) but I think the more valuable play is being plugged into a community of celebrities, athletes, VCs, artists and other first-movers. Imagine what ideas for
world domination business, politics and culture could come from this?
Any cultural force (i.e. hip-hop) could take huge advantage of this. But it's also powerful for niche interests and identities too. The table is big enough for everyone to have a seat.
IRL Benefits: Holding a jpeg in a digital collection nobody but you can see (unless you change your social media avatar, which many people do) has only limited benefits. That is, until we're living in the metaverse! *Cue Black Mirror theme song* Until then, we're going to see in-person extensions coming from holding NFTs. Look at the wildly successful Adidas mint, which includes merchandise and gear. Fashion brands will definitely tap into their ardent audiences to provide exclusive items and first-access for coveted clothing and sneakers. Imagine a Yeezy token getting you first in line for the latest drop? And then, throw in a backstage concert experience with Kanye. Or an Hermes token inviting Birkin bag collectors to VIP luxury experiences during Fashion Week? Expect musicians to offer concert tickets and meet-and-greets. Athletes and courtside tickets are a no-brainer. NFTs can seamlessly be taken offline.
Show Me the Money: NFTs have an estimated market cap at $7 billion and there's real money to be made. Using my previous example of the Bored Ape Yachting Club: Back in April 2021, you could mint an ape for 0.08 ETH (which was around $320). If you held onto that little investment, you could legit buy a home now in cash. And Crypto Punks and Bored Apes are just two of the blue chip NFTs. I'm currently holding a little Alien Fren that has rocketed to 10x its value (and is expected to go up, thanks to a Gary Vee shout out). Yes, one little photo of an alien is worth that much. We're going to see more and more people—especially tech-savvy young people—making life-changing money. What's interesting is the idea of royalties and how they come into play here. For NFT creators, they can make royalties from every subsequent sale of their token. Imagine a creator getting paid in perpetuity versus a one-off sale? Passive income from additional coin drops? Making decisions as a DAO? Residuals? Now, you're talking. Generational wealth. For young people and people of color who are not included (or welcome) in the world of traditional investment, this could be huge.
Are you bullish on NFTs? Already planning what island in Fiji you'll retire to after you quit your day job to become a professional flipper? SLOW DOWN. Next week, I'll break down why you should NOT invest in NFTs, so keep those diamond hands to yourself.
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