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NFTs: an investment that has become an asset

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NFTs: an investment that has become an asset

Sought after by some investors for their highly speculative dimension, NFTs have also become longer-term assets for others, in the same way as art or real estate.

Finding the right deal, the beautiful nugget... Since the summer of 2021 and the frenzy around Bored Ape and other collections, the NFTs market has clearly been marked by a degree of speculation, to put it mildly. You only have to look at the soaring prices of certain projects or even the increase in volumes, as very recently with Moonbirds, to understand the dynamic.

But in recent months, another trend, already in the making, seems to have been confirmed on the markets with investors increasingly looking to the medium to long term. These investors, who share an interest in cryptos with "speculators", don't necessarily want to find the right deal and make a killing in a matter of hours or days.

Most of these neo-investors are obviously fans of art and the crypto universe, but they are above all "private individuals looking to invest their money with a longer time horizon", explains Laurent Issaurat, head of art banking at Société Générale. "We're starting to see these kinds of profiles," confirms the head of another French bank, which is nonetheless not known for being pro-crypto.

While the number of these investors is difficult to assess - probably a few thousand in France, their weight will continue to grow as the market matures. "The market is very young, so a lot of very promising new artists are going to launch and emerge, but there are also going to be more and more well-established artists who will be sought after because their quotation will be stable and therefore secure for collectors," explains a French collector of NFTs.

According to 2022 figures from Hiscox, a specialist art insurer, more than a quarter of art buyers (27%) say they are inclined to invest in NFTs, without giving an investment level. In any case, the figure gives an idea of the potential momentum, especially in the event of an upturn in the markets, which have been rather sluggish for the past few months.

NFTs are likely to take a little longer to become assets, however, as investments in art or property are made over several years, or even decades, whereas those in NTs are still short-term, with averages of just a few weeks. "The holding period for collectors of NFTs is still more than 100 times shorter than that for collectors of traditional works," stresses Laurent Issaurat.

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