Capital & Conflict – brought to you by Fortune & Freedom
Watch the live stream on Friday
We’ll be streaming our latest episode of Southbank Live on Friday at 10am here on YouTube – if there are any relevant news items or investing topics you’d like John Butler and I to discuss, please send them over to us here.
CHEDDAR, SOMERSET – “Should I buy a house or a link to a picture of a pixelated monkey?”
Should one indeed?
It’s a fine question to be asking these days…
But before we get to that, there’s a different question I’d like to ask you. This is the very question myself and Charlie Morris have been pondering for our latest issue of The Fleet Street Letter Monthly Alert, going out tomorrow, and I’d love to know what you think.
Yes dear reader, it’s poll time once again… just click whichever answer you agree with:
Do you think the price of bitcoin will be lower than it is currently ($38k) by the end of the year?
I’ll post the results next week.
Now, back to the question about buying a house or spending the money on a pixelated monkey…
That question – asked only partly in jest – comes from Neeraj Agrawal of the cryptocurrency think tank Coin Center. He’s referring to the burgeoning market for images mounted on the Ethereum blockchain known as NFTs – non-fungible tokens.
The biggest success story of the NFT trend and the butt of the joke above are some very expensive NFTs called as “CryptoPunks” – but we’ll come back to them in a minute. First, some background on what NFTs are, for readers unfamiliar.
NFTs provide title to an asset (in this case, an image) with ownership, authenticity, and provenance all publicly verifiable. And as it’s on the Ethereum network, said title is maintained and enforced by no single authority, but a decentralised network.
In short, NFTs enable digital property rights without requiring centralised authority or the use of force. It’s a powerful idea, with the potential to change the world.
But as with many technological breakthroughs throughout history – bicycles, canals, railways, cars, the internet, etc – markets get a little too excited about them to begin with. Investor imagination runs wild with the promise the future may hold for the new tech, and no price seems too dear for any investment in the sector…
So when take a look at the prices of some CryptoPunks have been going for – small cartoon images of zombies, aliens, punks and apes – try not to be surprised. You can take a look here.
At the time of writing, a small image of a “zombie” punk with “chinstrap, earring, and crazy hair accessories” has just sold for $2.5 million. What a time to be alive.
You could buy quite a few houses with that, and in fair nick too. Could this in fact be a better use for a seven-figure mortgage than a permanent place of abode?
The answer to Neeraj’s question, asked publicly on Twitter, give a wry glimpse into just how hot the NFT market is right now:
“Depends if you want a good return or a place to live”.
“Heard housing is about to crash”.
“Maintenance on a house is more than maintenance on a link to a pixelated monkey picture”.
Some of the best jokes, like some of the best lies, have grains of truth in them. Given the booming market for NFTs right now, perhaps those that do bet the house on a pixelated image of an ape will profit from it… but I certainly wouldn’t recommend it.
We saw a big boom in NFTs through last year, and it preceded a massive boost in the bitcoin price – I wonder if this recent surge in NFTs is serving as an indicator once again that BTC is about to soar. That’s what spurred today’s poll, as I’d be interested to know what you make of BTC as it stands amid all this excitement.
I’m staying out of the pixelated ape market, but I do have a smidgen of exposure to NFTs through a cryptocurrency called $SAND. It’s the in-game money for a videogame called The Sandbox, which is similar to the highly successful Minecraft franchise, but with NFT creation built into it. The game runs on a “play to earn” model – players can build and then sell their in-game creations, or even their own games, to other players for $SAND.
While other video game currencies have been very successful (World of Warcraft Gold is a stronger currency than the Venezuelan bolivar), $SAND is unique as its governance is not monopolised by the game developers. Holders of the token can stake it to secure the network, earn yield, and participate in governance decisions of the Sandbox ecosystem.
I own this as a speculation, and not a long-term investment. I sold my original stake a few weeks after purchase when the price blew up (got in at £0.224, got out at £0.436), and will be letting the rest ride. Whichever direction it goes from here, I’ll be entertained either way…
All the best,
Boaz Shoshan
Editor, Capital & Conflict
PS Our latest podcast with Nigel Farage will be going live tomorrow. While our episodes have stirred some controversy, we remain committed to continuing them. Make sure you’re subscribed to Fortune & Freedom to get ‘em first.
Category: Investing in Bitcoin