NFT Investments Ltd aims to create a fund of Non Fungible Tokens
A Non Fungible Token is a unique digital asset. Non-fungible tokens, (NFT’s), are pieces of digital content linked to the blockchain, the digital database underpinning cryptocurrencies such as bitcoin and ethereum. Unlike NFTs, those assets are fungible, meaning they can be replaced or exchanged with another identical one of the same value, much like a dollar bill.
A Non Fungible Token is a unique digital asset. In the simplest terms, NFTs transform digital works of art and other collectibles into one-of-a-kind, verifiable assets that are easy to trade on the blockchain. Non-fungible tokens, or NFTs, are the latest cryptocurrency phenomenon to go mainstream. The demand for NFTs is growing significantly, particularly in the area of digital artwork (see the recent $69M sale of Beeple’s “Everydays-The First 5,000 Days”) NFTs can also be created in many other areas, replicating the traditional offline collectibles market for the digital generation.
Artists And NFT
Although NFT’s may be difficult for the uninitiated to understand, the payoff from this market has been huge for many artists, musicians, influencers, with investors willing to pay substantial sums to own NFT versions of digital images. For example, Jack Dorsey’s first tweet is now bidding for $2.5 million, a video clip of a LeBron James slam dunk sold for over $200,000 and a decade-old “Nyan Cat” GIF went for $600,000.
NFT Investments: First Pure Play
NFT Investments will be the first pure-play NFT fund listed in the world, the groups previous “firsts” on the LSE include first crypto listing ARB, first E-Sports listing GILD and the first consumer cannaboids listing CBX.
For the individual investor acquiring individual NFT’s can be complex, requiring cryptocurrency accounts, NFT marketplace accounts, choosing, curating and digitally storing the NFT. Whereas NFT Investments Ltd will allow investors to easily invest in a portfolio of such assets, the company can democratize the space for investors.
The company’s investment strategy is to target NFT’s on a global basis with a portfolio approach and generate deal flow from board, advisory and management team connections, The company intends to create value growth by assembling a portfolio of NFT investments and hold custody of them and create a long term portfolio of celebrity NFT digital rights.
The company plans to deploy resources in three areas:
1) Investing directly in NFTs through the leading established NFT marketplaces
2) Signing agreements with global celebrities to acquire, curate & monetize the rights to future NFTs, bringing to bear the company’s creative expertise
3) Investing in commercial projects within the NFT ecosystem
The Company considers that there is a sizable potential market for the NFT industry to emerge globally and take market share from the current collectables industry. The volume of NFT trade amounts to date is over US$500 million (source: nonfungible.com), with US$240 million taking place in March 2021 (source: decrypt.co). Already other areas outside of digital art and collectables have started to expand rapidly, such as celebrity NFT digital rights, virtual land, video game assets and NFT-backed loans. The Board anticipates that the NFT market will continue to grow over the long term with NFTs becoming a key underlying asset for the whole virtual economy.
The board of directors and investment committee includes Jonathan Bixby (Executive Chair) and Mike Edwards (Non-Executive Director) – the co-founders of Argo Blockchain (ARB) and Guild Esports (GILD) all listed on the London Stock Exchange.
Backed by a highly experienced Advisory Board, NFT Investments brings a unique approach to NFTs that allows investors to gain access to the NFT market. The company’s advisory board members include Mack Flavelle is an experienced product lead and game entrepreneur. He leads the team that built CryptoKitties , a video game built on blockchain that allows you to purchase, sell and breed virtual cats (considered by many to be the original NFT).
The Atari Connection
Also onboard are Peter Wall, CEO of Argo Blockchain, Nolan Bushnell, best known as the founder of Atari, the video and arcade games pioneer, and Zai Ortiz, who brings a 20-year career in the Hollywood creative effects sector including key roles in the Ironman franchise, Mission Impossible and DC Comics.
The IPO has proved extremely popular, NFT investments Ltd initially hoped to raise £10 Million pounds, this was raised to £20 million and the raised again to £35 Million. The total demand from fund managers, family offices and across the wider market is now in excess of £150 Million, with interest from Hong Kong, the far east, Dubai, South America and the USA. The board of directors and advisors have identified 4 – 5 items to be initially acquired so news on this is expected soon. The correct artworks have a habit of doubling or tripling once acquired and hence the net asset value of the fund could double or triple in a matter of months .
The Coinbase Effect
With Bitcoin recently hitting all-time highs near $64,000 and theCoinbase IPO in the USA, natural investors in NFT’s have tended to be crypto Millionaires and Billionaires as they sit on large crpto generated profits. This buoyant interest has been bidding up the value of NFT’s. It is also noted recently that artists prefer to sell on to institutional buyers who naturally increase the kudos of owning such works and who also protect and increase the value of their collections. So NFT Investments Ltd will be seen in the market as a preferred buyer, able to acquire works at a competitive rate in contrast to individual buyers. Now that they have £35,000,000 in the bank they can look to acquire rarer and more valuable items which is the right of the market to be in for this type of investment.
Argo Blockchain’s Management
NFT Investments Ltd will list on Aquis on April 16th, there are sizable secondary orders in place from institutional investors who were only able to obtain 10% to 15% of the order size they wanted. Orders have been placed around the 15-20p level.
The management team is led by Jonathan Bixby, co-founder of listed cryptominer, Argo Blockchain plc. Argo Blockchain floated at 20p two and a half years ago. It is over 200p now. It will be interesting to see whether NFT Investments Ltd will repeat this pattern?
(The opinions expressed here are those of the author, a columnist for Share Talk.)
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