NFTs Predicted to Be Common Part Of Investment Portfolios In 5 Years

The head of one of the world’s largest independent financial consulting and advisory firms predicts NFTs, an asset class growing briskly in popularity with Black Americans, will become a standard part of investment portfolios within the next five years.

Known as a non-fungible token, an NFT is basically a digital asset. NFTs are bought and sold often with cryptocurrency.

The fresh outlook is from Nigel Green, CEO and founder of deVere Group, with reportedly $12 billion under advisement. The prediction came after Jefferies investment bank this month raised its market-cap for NFTs to more than $35 billion for this year and over $80 billion by 2025, Yahoo Finance reported.

According to the outlet, “Jefferies sees digital assets as an emerging technology, and advises clients build a basket of investment exposure across video game, toy and game, and social media companies.”

In a news release, Green said, “Over the last year, the NFTs market has exploded, with a digital-only piece of art selling for $69 million in 2021. Since then, an ever-growing number of celebrities and artists, and fashion, music, tech and sports brands have been creating, buying and selling tokens.”

He cited some reasons why he believes investors have been pumping money into NFTs.

“First, this new digital asset class has value due to the blistering pace of the digitalization of our world. Millennials and Gen Z especially have digital lives and it’s natural to want to take digital representations of, say, luxury brands, music, sport, and art into these worlds — and now they can with NFTs.”

Green added, “Second, NFTs are making business models, especially in the creative sectors, more profitable and rewarding.”

“And third, this asset class can act as a major diversifier in investment portfolios.”

According to new findings, some 23% of Black Americans own cryptocurrency, more than double of the 11% of white Americans and higher than the 17% of Hispanics.

Still, people contemplating buying NFTs should do their homework and research before investing in the commodities. Insiders say potential investors should ask themselves will they be able to find a buyer for their NFT and how long will it take? Another point to consider is not every NFT will become valuable, increasing the risk of whether it will be a good investment or not.