According to a new global survey, the digital asset is gaining in popularity
Non-fungible tokens (NFTs) seem to everywhere these days, with celebrities and big brands making daily announcements about releasing a new digital token.
But are these assets – which many consider too risky - gaining traction among wealthy investors?
Yes, according to a global poll from advisory firm deVere Group, which found that 26% of the 450 of its high-net-worth clients said they are interested in adding NFTs to their portfolios by the end of 2022.
Allocating funds to digital images, audio clips, or GIFs, may appear to be a step way beyond cryptocurrencies, which are still not universally accepted by investors, but deVere’s CEO Nigel Green believes they are part of the digital investment future.
“More and more investors around the world are understanding and valuing the potential of NFTS as major global sports franchises, fashion brands and household name artists and musicians pile into the market,” he explained.
He added that the high-net-worth investors polled believe there’s inherent value in digital representations of physical things that people love. And they are helping to boost profits, especially for businesses in the creative, sports, and entertainment sectors.
Diversification
Green says that one of the reasons that investors may be interested in NFTs is diversification.
“Proper diversification of a portfolio across asset class, sector, region, and currency is the best way an investor can position themselves to mitigate risks and to seize opportunities when they are presented,” he said. “NFTs have a very low correlation to other assets, such as stocks and bonds, and can, therefore, lower your portfolio’s overall risk and volatility levels.”
deVere is in the NFT game having launched its own dV Gems platform earlier this year.
But other supporters of the digital assets are equally bullish.
Accelerate Financial Technologies’ CEO Julian Klymochko told WP that NFTs have the potential to be the next big thing after Bitcoin.
“This asset class is still very small, with an estimated market cap of $40 billion, and institutional investors have not entered the space at all,” he said. “But when they start to get involved and demand increases with supply staying relatively static for sought-after collections, prices are very likely to go up in that scenario.”
