NFTs Are an Exciting Crypto Asset Sector with High Potential – R. Pal
Former Goldman Sachs executive Raoul Pal believes that NFTs are an exciting crypto asset sector with potential for future gains.
In a recent video update, he tells his YouTube subscribers that he is starting to grasp the potential of NFTs.
The Power of NFTs
Pal explains that NFTs have taken his attention in the last year as he has started to understand the power of what they are and what they can do. With a blockchain, NFTs can be made into a one-of-one item, similar to a limited edition print or a unique painting.
It is like owning the original copy of the item, while others may have copies of the image.
Pal has allocated 10% of his Ethereum holdings to some benchmark NFT projects. He notes that since NFTs are primarily priced in ETH, they can behave as a secondary position in Ethereum. These tokens may act like high-end property in the future, outperforming ETH the same way pricey real estate outruns the economy in times of excess.
Crypto Punks and Bored Apes
Pal observes that when you look at the price of Crypto Punks and Bored Apes, they have remained incredibly stable in ETH terms. They had a blow-off top and recovered and have been trading at about 65 ETH forever. This stability is attractive because they fell only slightly more, even during the big crypto collapse in June. They rallied back and stayed at 65; whatever Ethereum does, they end up mirroring it, says Pal.
NFTs May Outperform the Rest of the Market
Pal predicts that NFTs may outperform the rest of the market. Like high-end property, when the economy starts booming, and people have more money, they tend to buy expensive high-end property. It tends to outperform the rest of the market, and he thinks the same thing will happen in the ETH economy.
As the Ethereum economy recovers, and it will do so over time, and the ETH price, economic activity, and the Ethereum economy go up, some excess returns may get recycled into assets like Crypto Punks.