The founders of an Andreessen Horowitz-backed Non Fungible Token (NFT) fund, which has raised $100 million, share tips for building a digital art portfolio that is well-protected from a potential ‘crypto winter’. Brandon Buchanan and Nabyl Charania have been Blockchain missionaries since 2014. However, Meta4 Capital co-founders only started to see NFTs as viable investment assets this year. Experts’ opinions on the NFT market and their advice to investors Cryptocoin. com we have prepared for its readers.
“People can feel that there is something very dynamic going on with NFTs”
The NFT market has soared this year, with monthly sales jumping from $400 million to $2 billion, according to JPMorgan. Marquee brands like CryptoPunks and Bored Ape Yacht Club have benefited from high-profile investors, including NBA star Stephen Curry and socialite Paris Hilton. Nabyl Charania, in a recent interview, says:
Celebrities only do so much about mass adoption. It still hasn’t quite moved into the spirit of the times as an understandable investment asset. It was beyond understanding to point out to investors that our thesis involved spending hundreds of thousands of dollars on digital horses on the Blockchain, which we would then ‘generate’ for extra yield.
Nabyl Charania was talking about Meta4’s first NFT fund launched in October. He and his business partner Brandon Buchanan have secured initial funding from leading venture capital firm Andreessen Horowitz and are targeting a total investment of $100 million. Nabyl Charania comments:
People can feel that there is something very dynamic going on with NFTs.
While the high volatility of NFTs has attracted many speculative day traders, Brandon Buchanan says he and Nabyl Charania are looking to bring institutional investors into the field by offering more stable returns from a larger alternative asset fund:
We want to enable investors to benefit widely from the asset class. It’s a market that’s maturing to the point where we feel we can participate. But it’s not mature enough for investors to make big gains.
Experts’ advice for individual NFT investorsi what?
Brandon Buchanan admits that building an NFT portfolio isn’t possible for everyone and says that the ideal amount to start investing is around 5 ETH, or just over $20,000. “But there are ways for people who don’t have millions of dollars,” Brandon Buchanan’s first tip is that retail investors should always be wary of NFT scams. These are becoming a concern for regulators in the crypto space due to the rise of fake tokens and insider trading on OpenSea. Brandon Buchanan has the following advice for those considering investment:
You need to do your own research because bruises can be difficult to identify. There are so many projects emerging, so there will be a lot of scammers and a lot of people who want to speculate and make quick money will inevitably be scammed.
According to Nabyl Charania, focusing on marquee brands can be a way to avoid NFT scams. The expert says Meta4 tracks well-known brands like Bored Ape Yacht Club, CryptoPunk, CryptToadz and Zed Run, as well as verified creative artists like Dmitri Cherniak and Mitchell F. Chan. Nabyl Charania’s recommendations are:
My personal preference is to support known projects or artists, even if the entry point is higher. I recommend everyone do their own research, resolve disagreements on projects you like, and try to understand the community and value proposition of the project you want to undo.
Brandon Buchanan also recommends investing in new projects. This refers to digital artworks recently stored on a Blockchain. Investors have a better chance of negotiating with these assets, as opposed to longer floating NFTs, he says.
I’m looking at the Art Blocks release schedule and looking for new projects, some of which you can get for 0.25 ETH ($1,100). Sites like this are a watchdog, a great place to look if you’re new to the space.
According to Brandon Buchanan, tracking whale wallets is another way to find undervalued NFT gems. The expert names two anonymous collectors ‘Pranksy’ and ‘Vincent Van Dough’ to follow. Buchanan,
One of the nice things about blockchain is that everything is on a public ledger. So you can look at major wallets and see what they’re buying. Imagine being able to see Warren Buffett’s trading strategy as it is. You can really do this with NFTs.
Finally, Brandon Buchanan and Nabyl Charania agree that individual investors should subjectively buy, invest in NFTs. Because they appreciate them on an artistic level, not just for speculative reasons. Buchanan,
There is a very rich level of art being realized. I encourage people to buy works of art that you really like and are genuinely interested in, not just the idea of speculation. When I look at my cryptocurrency wallet, I see items that I bought and that give me joy. Making money is an added bonus.