Just when you thought you’d got your head around Bitcoin, try to process this: Buying a 10-second video clip for $US67,000 ($86,500).
Then selling it for $US6.6 million six months later.
That’s exactly what Miami-based art collector Pablo Rodriguez-Fraile did, and it’s the hot new trend in digital assets: Non-fungible tokens.
The 10-second clip was a piece of digital art, created by maker Beeple.
But a non-fungible token – an NFT – can be anything digital, including sports cards, ‘virtual land’ and even trademarking a cryptocurrency wallet name, Reuters reported.
The NFT space has been exploding during the pandemic, as people increasingly live out their lives online.
Rodriguez-Fraile told the news outlet the clip he invested in was valuable because of who made it.
(An NFT is verified through a digital signature, to show it’s legit.)
“You can go in the Louvre and take a picture of the Mona Lisa and you can have it there, but it doesn’t have any value because it doesn’t have the provenance or the history of the work,” said Rodriguez-Fraile, who only bought the piece in October.
“The reality here is that this is very, very valuable because of who is behind it.”
The NFT space is on the way up, but some analysts caution it might not stay this valuable for long.
OpenSea is one of the key marketplaces for NTFs. Its February sales totalled $US86.3 million, up from $US8 million in January.