“Most people are cheering, but at the same time, shaking their heads and asking, when is the bust going to happen?” said Jane Leung, investment director at SVB Private Bank.
One who entered the frenzy was Matthew Schorr, 35, a lawyer in Cherry Hill, New Jersey. For years, he has been looking for major investments, but has lost interest in the stock market and abandoned Bitcoin after his friends dismissed the cryptocurrency as “fake money”. He now regrets this, because the value of a single Bitcoin has risen to over $ 57,000, meaning that the eight Bitcoin he paid for a Domino’s pizza in 2011 would be worth more than $ 450,000 today.
Mr. Schorr did not want to lose again. Then, as of January, he spent $ 5,000 to buy 351 videos from NBA Top Shot, a site for exchanging basketball highlights clips, after seeing social media conversations about them being sold for tens of thousands of dollars. The value of these clips has now skyrocketed to $ 67,000, according to Momentranks.com, which tracks sales.
Clips are a type of investment known as NFTs, or non-fungible tokens, that have taken off in music, art and sports. Digital tokens use computer networks to prove that a digital item such as a video, image or song is authentic, giving the item a value – at least in the eyes of the buyer. Some compare NFTs to digital business cards. (The creators of the underlying works typically own the copyright.)
Skeptics consider NFTs to be the most questionable assets, since an NFT image can be copied and shared infinitely. Still, enough people are convinced of the value of authenticating tokens that they fit in with another market-driving phenomenon, FOMO, or “fear of losing”.
“I’m trying to control my pulse and not let myself be left behind again,” said Schorr, who spends up to five hours a day researching the market and talking to other collectors on Discord. “This kind of return in six weeks is completely unprecedented in any financial vehicle.”
Last month, NBA Top Shot has exceeded $ 232 million in total sales since it started last year – including $ 47.5 million in single-day sales.