How NFT and Crypto may disrupt Asset Management and Private Banking

The crypto chatter on how much it could disrupt traditional banking and asset management isn’t a new one. The Non-Fungible Tokens (NFTs) got jolted into the spotlight in March 2021 when Christies’s sold the American digital artist, Beeple’s digital collage for $69.3 million 💸💸

More recently, the Ukraine government announced its plan to release NFTs for funding their war and media efforts.

Asset management and private banking aspirants who need more reason to understand why this is an important investment trend you must know about, here’s a stat for you- as per a CBInsights report, funding for #nft companies has risen as high as  6,427% year to date in 2021.

 

NFTs are now a billion dollar industry, but what are they really❓

💡An NFT can be a unique digital or physical asset (a meme, painting, photo, video, game-like #Cryptokitties) created and stored on a blockchain. They can be traded as collectibles and have an inalterable certificate of authenticity and proof of ownership that allows them to maintain value. The more unique the token, the higher the value. Rock bands (Kings of Leon), companies, artists, sportspersons, and entrepreneurs have released NFTs and invested in them. So like other cryptos, NFTs are already contributing to the disruption of traditional investment.

But issues that traditional banks grapple with is how can we then appraise the value, risk, and reward associated with an NFT (especially since it hasn't been around like a 19th-century art/ artifact)? What about the compliance implications? Just like the traditional markets, NFTs too have experienced volatility similar to other cryptocurrencies.

The digital shift propelled by COVID-19 marked a spike in NFTs and other cryptos, so it is definitely here to stay according to experts. But their long-term impact is yet to unfold as the best practices for NFT investment are still being deliberated upon by the asset management bigwigs. The sluggish uptake of all kinds of digital ledger technology (DLT) owes itself to how traditional banks are still catching up with the technological disruption. While Fidelity Digital Assets has created their crypto fund, #jpmorgan has acquired two cryptocurrency exchange customers, #coinbase and Gemini. Companies like PayPal now allow cryptocurrency transactions. So this is a space that needs to be monitored closely!

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