Technology has completely changed how we make investments today. User-friendly apps like RobinHood, Acorns, and SoFi provide easy access to make stock trading investment decisions and provide cutting-edge software for users. Apps like Coinbase, Cashapp, and Binance provide easy access to make cryptocurrency investment decisions. The blockchain, where cryptocurrency exists, provides the opportunity to invest in digital currency and digital assets, creating an exciting new way to buy and sell art.
Traditional assets aren’t the main focus anymore, as more people rely on technology for smarter investing options. Two investment areas that boomed during the pandemic are cryptocurrency and art, leading these new digital assets into everyone’s portfolio who wants to diversify. At the beginning of the pandemic, Bitcoin (BTC), the first cryptocurrency, was valued at $7,300 and a year later, the same token was valued at $46,800, a 640% increase. At the beginning of the recession from the pandemic, high-net-worth individuals were able to use their art assets as collateral to obtain cash.
Cryptocurrencies have gained even more popularity since the pandemic. One reason is because they are decentralized and are not influenced by central banks or politics. They are influenced by other factors. One crypto option in particular being Dogecoin (DOGE) started as a humorous parody gag poking at authentic cryptocurrencies, but has ultimately gained the eye of both nominal and seasoned crypto traders. However, many are wondering why its value has such drastic rises and falls. At the beginning of May, Dogecoin reached an all-time high of $0.70, but since then has been on a rollercoaster experiencing several lapses of both highs and lows in a short term trading period.
A large proponent of the token’s popularity originally rose from celebrity interest from people like Elon Musk, Snoop Dog, Gene Simmons, Mark Cuban, and others, but even a simple appearance on SNL from Elon Musk can result in a near apocalyptic downfall, causing the stock price to plummet, shifting the stock price from $0.70 to $0.47 nearly overnight. During his appearance on the show, Musk referred to Dogecoin as a “hustle” which many believe spooked investors. “Dogecoin initially surged in January, jumping by a staggering 972% from $0.007 the day before.” This was the result of Reddit users urging it to hit a value of $1 per coin among the shortage frenzies around the same time as the AMC battle.
Some speculate that perhaps it is the faulty error of a perceived large “whale” holding the stakes and keeping the Dogecoin price down. “’Whales‘ are individuals who hold large amounts of coins of a certain cryptocurrency. This makes them powerful enough to manipulate the valuation of the cryptocurrency and results in price volatility.” Even despite the drop in Dogecoin’s value, this whale’s account remains intact. In February, Dogecoin’s value was around $0.0018 a coin. According to data from Bitinfocharts, the Dogecoin ‘whale’, starting buying in early February. Now this account has around 28 percent of Dogecoin’s total supply of coins. This cryptocurrency has begun to decline, but before its downfall, this whale account had $22 billion worth of Dogecoins.
On the other hand, others suggest that the fluctuating value of Dogecoin may be due to large investors all cashing out their Dogecoin holdings because of the spike in value. Basically, they are trying to play it safe as Dogecoin can be a risky investment. The value can quickly soar up or down at any given moment. Trying to time the market is very tricky and near impossible for any human to do.
Another blockchain technology that has gained more popularity recently is Non-Fungible Tokens (NFTs). NFTs are unique digital assets of art being bought and sold on the blockchain via the transaction of cryptocurrency, such as Ethereum (ETH). NFTs aren’t just the asset file (GIF, JPG, MP3, etc.) but also the certificate of authenticity for the art collectibles, ranging from art, to music, to trading cards. Research from L’Atelier BNP Paribas and NonFungible.com found that NFTs were a $250 million market in 2020 and investments are up 299% year-over-year. Sales of NFTs soared to over $2 billion in Q1 2021, up more than 20-fold from $93 million in Q4 2020.
What makes NFTs different from cryptocurrency (Bitcoin, Ethereum Omni, and others) is that they are non-fungible, meaning that they cannot be replaced by something else. Bitcoin is fungible and allows you to trade one for another Bitcoin and you’ll have the exact same thing. A one-of-a-kind NFT is non-fungible because if you trade it for a different NFT, you’ll have something completely different.
NFTs piggyback on one of the first practical applications of Bitcoin, colored coins that debuted in 2013, just before the genesis block of Ethereum was mined. The idea of colored coins, at the time, was to mark or alter certain digital tokens and transfer or issue the assets on the blockchain. Before colored coins, marking or storing assets on the Bitcoin blockchain was impossible.
NFTs are quite parallel to art and the real world’s alternative assets by looking to provide an additional asset to traditional ones that we’re currently used to, like physical coins and bills. By implementing and utilizing this new alternative asset form, people can avoid damage to physical assets (you can’t damage a digital asset with spills or bent corners), and NFTs provide a more liquid asset that you don’t have to ship and is easier to sell. Further, a long-time challenge of alternative assets is the concept of ‘provenance.’ Provenance refers to tracing back the history of the asset to ensure that it’s the real asset. With Blockchain technology, any buyer can transparently see and verify the assets history, ensuring they have the authentic version that they’re seeking. While NFTs carry real asset value like stocks or cryptocurrencies, they’re less liquid as they’re non-fungible, meaning they’re each ‘unique.’ As a result, unlike with stocks and cryptocurrency you need to find a specific buyer who wants your specific asset.
NFT’s can provide a new source of income for artists and creators around the world. OpenSea is the world’s first and largest NFT marketplace, with digital assets for sale ranging in price from pennies to millions. Even Christie’s Auction House has sold NFTs, most notably, Mike Winklemann’s, aka “Beeple,” piece called “Everydays – The First 5000 Days” that sold for $69 million. Beeple is a 3D graphic designer who produces a variety of digital artwork ranging from short films, Creative Commons VJ loops, and VR/AR work. He has worked on concert visuals for Justin Bieber, One Direction, Katy Perry, Nicki Minaj, Eminem, Zedd, Deadmau5, and many more.
Other celebrities, like celebrity athlete Michael Jordan, are selling NFTs in the form of trading cards featuring famous NBA players to NBA fans on Dapper Labs with a valuation of 2.8 billion. Dapper Labs is a Flow blockchain product made for fun, games, and digital collectibles. They created Top Shot Moments, a blockchain-based platform to buy, sell, and trade licensed sports clips for NBA fans, and has over $400M+ USD sales across Rookies, Vets, and Rising Star players. They reached $472 million during Q1 2021 on the Flow platform.
Dapper Labs also created a blockchain-based game that is unrelated to sports. CryptoKitties is their blockchain game on the Ethereum blockchain that allows players to purchase, collect, breed, and sell virtual cats. It is one of the earliest attempts to deploy blockchain technology for recreation and leisure.
Independent artists are also profiting on NFTs, despite not having celebrity hype. Dean Christensen aka “Deansace” is a figurative painter who produces psychedelic, 90’s-era type NFTs based on the influence of smartphones, online personas, the human need for connection and approval, and social media. Another independent artist, Zachary Winterton, created a collection of unique crypto characters inspired by famous hoopers called CryptoDunks, bringing back retro-style with 100% locally sourced NFTs that have a parody focus.
Artists can profit in other ways from the sale of the NFT by also setting up smart contracts that charge royalty fees. These contracts can stipulate that the artist or creator of the NFT makes a percentage of the selling price of copies or originals of the work. For example, Matt Kane, a Chicago-based artist requires a royalty of at least 10% on secondary sales and has made $13,000 in royalty fees alone this year.
Artists aren’t the only ones making money on NFTs. “Art flipping” is when someone buys an original NFT soon after it is minted, as an investment, and then flips it for a higher price. These investors support budding artists by purchasing the artist’s NFT and the investors are placing a bet that the artist will become famous, in which case the value of the art will rise significantly. There is a risk to this type of investment because it is not guaranteed that the value of the NFT will go up.
Ultimately, Cryptocurrencies and NFTs are providing investors with new, more accessible ways to build wealth, regardless of current income status. As with any investment, there is a risk of losing money, but these emerging markets have shown to be investment opportunities that will stay and continue to grow over time.
I’m Athan Slotkin, also known as The Shadow CEO as my clients have started to call me over the years. I’ve worked as a business strategy consultant for over 15 years, helping elite firms, small businesses and entrepreneurs alike achieve their biggest dreams.
On the side, I’m an avid athlete – enjoy basketball, football, soccer, and tennis – expansive world traveler, and food lover/critique (who isn’t?). In my early years, I hustled to pay for both my BA from Cornell University and my MBA from Yale University through poker, quickly advancing to the professional level where I teach on the side still today. Utilizing my expertise in game theory, I focus on the competition, ensuring that the businesses I advise and guide are positioned appropriately. I love sharing my passion for entrepreneurship with the world and often work with media outlets everywhere from CBS to SiriusXM to discuss how current events affect small businesses and the entrepreneurs that run them.
On a more professional note, I’ve consulted at nearly every level. From organic tampons and post-surgical care to meshed SaaS-based businesses and generalized corporate ventures, covering a breadth of industries including travel, financial services, real estate, retail, grocery, and even gas surprisingly enough. My unique proposition offering though lies in providing advice and guidance on how to fundamentally develop and implement a successful business strategy.
Before going private with my own consulting firm, I had worked with global brands like American Express as well as the Black, Platinum, and Gold Cards to create, manage, and refine their rewards programs, products, and services to align with the company’s vision … or someone’s vision for the company. Alongside those efforts, I had also previously served as a Forbes Council member for Forbes Los Angeles Business Council.
I’ve had the privilege to work directly with thousands of entrepreneurs from all around the world. Luckily having traveled to 120 countries, my goal is to get to every country in the world, as I truly believe that working with people from all walks of life bring new ideas, thought path, and the unique opportunity to connect and create something amazing together.
Growing up in NYC myself, I was always mesmerized by the array of diverse people and backgrounds all around me. It thrilled me that there was always a possibility to build off nothing and do something great. I say that I’m lucky because not everyone is as fortunate. Through business, we have the opportunity to connect varying landscapes on a global level. Working with clients throughout the world gives me that day-to-day ‘travel’ experience – making my life richer, and as a result, heightens the enjoyment of my work and what I can give back to other people.