As crypto and stock markets continue to underperform, VCs began to look towards booming NFT market for big returns.
NFT as the holy grail
2022 savings grace It’s been a sad year for investors around the world as, after a period of sustained growth due to the pandemic and other factors. Global markets are starting to “correct” leading to capital losses, market capitalization for companies and investment losses for investors.
In the face of financial disaster, the NFT did exceptionally well, and in the past few weeks we’ve seen a record number of developments in the NFT and Web3 space. With that in mind, it’s only a matter of time before traders turn to the NFT for big returns..
Usually, sophisticated investors make returns from a diversified portfolio, and when some investments fail to pay dividends, they rely on others to fill the gap until when the respective market recovers.
As the stock and crypto markets continue to falter, the upward pressure on NFTs in distribution and delivery is enormous. In recent weeks, venture capitalists have taken action to show that many investors are placing most of their hopes on the NFT market to act as their saving grace during difficult times.
Ever since the NFT began to gain popularity, this type of digital collectible has faced accusations of being nothing more than a bounty for greedy investors. The time shows that the reality is much different.
Venture Capital firms enter the NFT market
Andreesen Horowitz is one of the largest and highest-capitalized venture capital firms in the world. It is leading the charge for direct investment VCs into the NFT market. Of course, Andreesen Horowitz is not alone; other venture capitalists are making their plans to invest directly in the NFT market or are working on their own investment strategies.
Paradigm is another major venture capital firm that has invested a lot of its resources in the NFTs. When Andreesen Horowitz and Paradigm began to increase investments in NFT asset class, the market took notice because companies of this size are not known for making erratic financial and investment decisions.
Venture Capital funds and investors, including Startup Wise Guys and Pointer Capital, recently also entered the crypto and NFT market. Lukas S. Zgiep from Pointer Capital commented: “we should get out of our comfort zone and look at cryptocurrencies and NFT differently”
With that in mind, as venture capitalists throw millions of dollars into the NFT space by purchasing digital land, digital collectibles, and digital art, the market cannot ignore the their actions and these raise a number of significant questions.
Consider the case of Punk6529, an anonymous web personality who was able to raise about $75 million from about 350,000 followers to invest in “blue chip” NFTs.
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