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Opening the Investment Case for NFTs

Like many technophiles and adventurous investors, ClimochCo believes Web3 will be the big wave of the future, and NFT represents the best pure-play way to gain exposure for its expansion. From a price performance perspective, they have shown no correlation to monitoring any other asset class as they respond to an entirely different set of economic drivers.

Even though they have existed since 2014, NFTs really only came into being in their last year, and the space is at a very early stage. Where KlimochCo sits, it’s in line with bitcoin in 2013, with most of the adoption currently coming from crypto enthusiasts and forward-thinking individual investors.

“This asset class is still very small, with an estimated market capitalization of $40 billion, and institutional investors have not entered the space,” he says. “But prices are likely to rise in that scenario when they start to join in and as demand picks up with demand remaining relatively stable for post-collection collections.”

While the market for NFTs is still evolving, some NFTs and NFT collections have already emerged as highly valuable and very rare assets. According to Klimochko, those types of “blue chip” NFTs are distinguished by large market capitalization and liquidity in terms of trading in the market, as well as recognition within the community.

“One of the main value drivers of NFTs is community participation,” he says. “If you all have the same asset, then anyone who promotes your property promotes your property. There is a set of property ownership within the community that really drives a lot of brand value…

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