Despite being around since 2012, nonfungible tokens, better known as NFTs, only went mainstream in the last year following the most recent bull market.
For many, this asset class came out of nowhere, going from something completely unheard of to a major brand investment. The world has seen evidence of this by the actions of celebrities like Justin Bieber posting their NFT purchases on social media and companies like JP Morgan and Facebook (now Meta), solidifying their position in the metaverse. The market has since entered a boom, with a valuation of billions of dollars as a standalone ecosystem.
With more funds being pumped into this market, spurring on continuous purchasing behavior, many prospective investors have begun asking, "What the harm is in joining in on the meteoric rise?"
Much like other investments in this world, NFTs are more complex than they seem, meaning that investing based on the trend "or hype" alone can be a dangerous game to play. Consider the parallels drawn from the dot-com bubble, which resulted in the overhyped valuation of several web-oriented companies. These one "lucrative investments" ended up fueling widespread bankruptcy in the market crash of 2000, a cycle that occurred again with the initial coin offering (ICO) bubble. Time and time again, bubbles are driven by wealthy investors who invested early on, rode the driven-up hype and sold for a profit long before the laggard investor even made their first purchase.
But history isn't meant to scare investors away from NFTs entirely. Instead, it is there to demonstrate an opportunity to improve the thought process behind investing. Consider that several web-oriented companies emerged from the dot com as profitable investments that continue to
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