NFTs are an alternative asset. NFTs are digital assets that are part of the Ethereum blockchain. You can use them in various ways. You can use them to play games or even use them for just art.
Anything digital is a good investment. As an example, CNBC reported that an investor bought a digital picture of a rock for $3 million in August. The more brands get in on the crypto game, the more likely people are to want to get involved. The more people want to get involved, the more money gets put into crypto.
All of these companies are spending millions of dollars on digital assets, but no one will ever see or touch them. We talked to some of the top experts in this space, and this is what they had to say.
Companies Are Riding The Wave
Tal Lifshitz, a partner and co-chair of the cryptocurrency, digital asset and blockchain group at Miami-based Kozyak Tropin & Throckmorton law firm, says that “no one will be surprised to see more of these cases.”
“NFTs are trendy, fun, and cutting-edge technology that actually has the potential to redefine the way these brands do business and engage with their consumers,” he says. “The more important question is, why are big brands not spending big money on NFTs?”
The fact is that increased adoption tends to take on a life of its own, and NFTs are currently in the early stages of becoming a major part of our lives.
Increased adoption of non-fungible tokens means that the value and utility of them will increase exponentially. If no one adopts them, they are useless. If lots of people adopt them, they will be incredibly useful. This might be the future of non-fungible tokens.
Companies Are Looking For Ways To Boost Earnings
Lydia Hylton, an investor at Redpoint Ventures, also points out that companies are ultimately driven by the potential for earnings, and NFTs are a new revenue stream and engagement tool for brands.
At the moment, LV is the only exclusive brand that is exploring LV-branded NFTs for the metaverse, says Hylton. Other brands are constantly looking for ways to increase engagement with customers.
In the end, NFTs can be used to reward and incentivize consumers through innovative gifts, exclusive access, and more, says the investor.
Businesses Follow Trends
Dustin York, an associate professor of communication at Maryville University, says companies are jumping on the bandwagon because people are spending so much time in virtual worlds.
“Brands follow their customers,” he says. “When customers gravitated toward malls, brands followed. When customers gravitated toward e-commerce, brands followed. And when customers are now gravitating toward Web 0, digitally native brands are following, giving even more legitimacy to NFTs.”
However, York says that consumers should prepare for an NFT hype cycle, and that we are currently in the fast growing hype stage. At some point, he says, there will be a dramatic drop in the demand for standard NFT art.
E-commerce is called a fad during the dot-com bubble. It then rose above and is now part of our everyday lives.
The Metaverse Is The Future
Andrew Lokenauth is an investor who is positive about brands using the metaverse to market their products. He says this is because the digital world is the future. Many people spend several hours a day in virtual worlds, and that number will likely increase.
Lokenauth says we have had many popular artists perform concerts in the Metaverse, including Justin Bieber, Travis Scott, the Weeknd, and Ariana Grande. He thinks maybe fashion companies will be next, and hold fashion shows in the metaverse. The possibilities are endless, and that is why companies are spending big.
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