“NFTs are here to stay,” says Gary Vee, who made about $90 million in 90 days from NFTs.
Celebrities have been jumping on the NFT bandwagon, with many of them investing in NFTs or creating their own. On average, NFT sales can currently range anywhere from 15,000 to 50,000 per week, as per NonFungible.
This makes me wonder what is all the fuss about. Should I hop on the trend and buy them or are celebrities making a fool of themselves?
What are NFTs?
NFTs (non-fungible tokens) are digital assets that are unique and stored on a blockchain. They can represent anything — from artwork to music, videos, and even tweets. Even writers are minting their articles as NFTs. Watch this video for more.
Nameet Potnis says, “NFT are immutable tokens! Think of them as collectibles that can't be changed and only one of them exists. For eg., you want to save the ticket of a legendary music concert, you frame it. NFT could be a digital proof you buy and own.”
Musicians like Grimes, Kings of Leon, and 3LAU have all released NFTs (Grimes' collection sold for over $6 million). Actors like Mark Ruffalo, Snoop Dogg, Amitabh Bachchan, and Resse Witherspoon have embraced this market space too. Even NBA Hall of Famer Shaquille O’Neal launched his NFT collection last year creating new opportunities for his fans and marking his place in the non-fungible token sector for the long haul.
To understand NFT communities, check out this subReddit.
Why Do Celebrities Buy or Create NFTs?
For starters, it’s a great way to monetize their work and engage with their fans. While for many celebrities, creating NFTs is a form of expression, for others, it’s just an investment opportunity.
While you’re at it, watch this video!
Quite a few celebrities have garnered loyal communities with their NFTs — something that wasn’t possible earlier.
On the other hand, it could be argued that celebrities are simply taking advantage of an emerging trend and trying to make some money (yes, possibly without really understanding what they’re getting into).
Capital Is Swirling Around
The recent surge in the popularity of NFTs has been a blessing and a curse, as the market has seen an influx of successful projects that have unfortunately been followed by rug-pulls.
Though celebs are making a fortune., it has also caused some concern among investors.
I spoke to Chirag, a crypto investor, who shared his perspective on celebrity NFTs.
Celebrity NFT purchases have four possibilities:
- Utility-based: Ample celebrities have purchased Bored Ape YachtClub (BAYC). Purchasing a BAYC gives you access to a community of around 10,000 millionaires or billionaires around the globe. Utility of this community: monetizable connections.
- Marketing for the project: The NFT project pays the celebrity to purchase their NFT. Outcome: The project is in the news, building up hype & the celebrity also gets his PR as a bonus.
- Own PR: A celebrity may buy an NFT in a trend for publicity. If planned properly, it can be a great strategy.
Purchase a trending NFT ➡️ Get on the news (a trending subject is great for the newsroom)➡️ Sell the NFT(no news, goes against the trend) ➡️ PR done, money recovered.
4. FOMO: In this case, you buy because you fear missing out on a trend and being left behind.
The market for trading is still largely unregulated and there’s no guarantee the value of these tokens will remain stable over time. Justin Bieber recently made headlines for his sinking Bored Ape NFT which was purchased at $1.3 Million USD and is now worth $69K USD only.
No wonder the ape looks unhappy with this purchase! 😁
Additionally, there is no guarantee that the celebrity will continue to be associated with the token or promote it in the future. This means that investors could potentially lose money if they invest in an NFT without doing their due diligence first.
This is what happened after few celebs released their NFT projects.
Earlier this year, Frosties NFT and Bored Bunny NFT Project were exposed as a Rug. Floyd Mayweather, DJ Khaled, French Montana, Jake Paul, and more were paid to promote the Bored bunny.
Read this Twitter thread about the Bored Bunny NFT Rug.
Is Celebrity NFT Shilling a Moral Disaster?
Celebrity-endorsed NFTs encourage people to invest in something they may not understand or afford. It also creates an environment where people are more likely to take financial risks without fully comprehending the potential consequences.
Furthermore, it can lead to market manipulation and price inflation as celebrities use their influence to drive up prices for their own benefit.
It is clear that the use of NFTs is here to stay and will continue to grow in popularity among celebrities and fans alike. To avoid falling victim to scams, it is important for investors to do their own research and become knowledgeable about the industry before investing, rather than relying solely on the advice of celebrities who may not be well-versed in NFTs.
At this point, it’s hard to say whether celebrities are making a fool of themselves by investing and creating NFTs. It’s possible that they could make some money off of their investments, but it’s also possible that they could lose money if the market turns sour.
Not all is bad though!
Surely you’ve all heard of Ellen DeGeneres’ bad cat drawing NFT — according to Variety, Ellen raised about $33,495 for a food-relief organisation. Shawn Mendes is financially supporting young musicians with his NFT sales. Reese Witherspoon, of course, drove more benefits to World of Women by not just buying a token, but also through a partnership with her company Hello Sunshine’.
Only time will tell if celebrities have made a wise investment or not.
Or is this another example of how technology is changing the entertainment industry? What do you think? Write to us, we’d love to know your thoughts!
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