Op-Ed: The Joys of Market Cynicism – NFT, ETF, Cryptos and the Rise of New Investment Classes

The first text was a 15 character message sent to Richard Jarvis, an employee of Vodafone, wishing him “Merry Christmas” – © AFP

If you’re cynical enough, the news from the blockchain-based NFT (Non Fungible Tokens) market makes a lot of sense. This is the creation of a market for intangible assets based on durable goods.

Before you start – This opinion piece is written on the basis of complete mistrust of any market based on hype, not just for the sake of bashing NFTs with easy punches. New asset classes are always delicate and this market must reach at least the adolescent level, quickly.

Add ETFs (Exchange Traded Funds) and NFT-based cryptocurrencies and connect them to real investment markets. You examine a vast array of assets that have evolved in plain sight into possible monsters. Lots of money is swirling around.

A bit of history and culture

Case in point – The huge sale of a $ 69 million all-digital work of art, The first 5,000 days, was the benchmark for digital art values ​​in many ways. This work of art comes with an NFT guarantee of authenticity. In seconds, NFTs became the shining light of future forms of investing… Maybe.

Cynics will notice that this sale was actually an investment in the art market. The TVN was a supplement, not the real object of the sale.

After this sale, a lot of other things came into the market in the form of NFT. The CEO of Twitter created an NFT for the first Tweet. This is indeed a “collectibles” market, and this market can be traditionally described as a great way to collect pure waste.

No more cynicism – It was a “historic” investment. A unique piece of history. Again, the NFT was added to it, not as a full-fledged value.

Let’s not confuse the high end with the low end here. Not all NFTs are garbage, especially in the high end with some really unique items, but you can see the potential. Sheep buy what the sheep like, and therefore the inherent risks.

Some sheep literally buy their place in the slaughterhouse. NFTs are severely affected by the crystal-meth hype, which is doing them no service. Some of the hype is almost hallucinatory.

Then there are the “memes actions,” social media-driven investments. These things can go up, quickly, and fall apart in front of your eyes. They are the modern version of market speculation, usually paid investors throwing ridiculous or more likely worthless things that they bought on a low price.

… And yes, everyone is an NFT expert in these stocks. Lordy, Lordy, do we have any experts. The same NFT link as at the top leads to expertise at a level even a coroner would be hard-pressed to define. There is no problem, folks. We’re all dandies here at Prairie Dog Skank Land Investments, yes siree.

In this utterly untrustworthy (and rather cheesy) environment, it’s no surprise that many experts despise NFTs so much as sucker bait, and with good reason. Billions of dollars, however, are pouring into the NFT market, both directly and indirectly. This spreads risk in certain particular ways in traditional investment markets.

Investments, Cryptos, Accounts and NFT – A Match Made at Disneyland?

The ETF market invests in sets of assets, usually stocks, in specific and specialized investment categories. The problem is that NFT assets do not match the usual asset mix in many ways.

For example – How do you value these NFT crypto assets for investment accounts? How do you even enter them in the balance sheets of an ETF? These values ​​don’t just move; they literally sparkle in a sometimes confusing and often infuriating bandwidth price range.

In basic accounts, you can draw a line in the sand and date the values ​​of your assets. … But who will believe them, when they can check current values ​​with one click? If the values ​​are greater than your number, you are a saint for investors. If the values ​​are below, you are the person your parents warned you against.

Meanwhile, where did your balance sheet go during those three or four seconds? All over. Anywhere at all. It looks a lot more like a spot commodities market in many ways, it’s nonsense. This is where physical accounting just can’t work in the traditional sense.

(To clarify – Accounting standards can be applied to NFTs, Cryptos, etc. Account numbers will not be falsified or fraudulent, simply because they can be easily verified through blockchains. They will be 100% accurate. The problem is, these numbers also become stale in such volatile business environments.. A glance at the Ethereum price index for a day says all you need to know.)

It is also theoretically the dream of a money launderer. Oh my gosh my (actually) nowhere to be found money just got a lot more from crypto, NFT etc. How awful ! Now people will think that I am some kind of capitalist materialist, not just a shy money launderer. These guys can actually make money by accident as well as crypto or other securities move.

Define Risk – Scams, Losses, Profits and Social Media Focused Markets

Then there are saints of holies, online scams, and other traditional basic asset securities. Vox.com has a truly classic one-stop-shop story of an NFT owner getting ripped off for millions. It’s pretty awful, but it also all depends on the range of unreported risks in these markets. There are serious risks of fraud, and crypto wallet raids that cleanse people are not really out of place in this market. The NFT loss news also reads more like a raffle than a bargain in some ways. The meme stocks also get a few mentions.

A site called Ledger Insights.com has an interesting perspective on profitability – According to their studies, NFT and money-making investing machines are anything but the image of the market. This is not the Wild West; it’s a mix of buy-bots, loss on resale and an interesting 70% loss investor.

Note the “resale” problem. This is the real sting. Any investment asset is supposed to increase in value. OK, short term flips in any market are natural risks of loss. NFTs, however, are not traditional market values. They are linked to values ​​in other markets. The first 5,000 days will have resale value specifically due to the art market, and especially not NFT flip-happy investors. The same goes for other high-end NFTs.

The joys of market cynicism

This is where market cynicism pays off:

True values ​​are intrinsic values. These are the values ​​that these things would have if the NFT market had never existed.

A high value means that sellers can control the resale values. The first 5,000 days is a work of art. Art owners don’t return their Van Gogh collection every day either, and certainly not at a loss.

Cultivate your cynicism, Grasshopper.

Why, O Master?

Because you will be a solvent grasshopper.

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