Wednesday, December 8, 2021

A ‘more honest’ stock market – TechCrunch

Hello friends, and welcome back to Week in Review!

Last week, I talked about Clubhouse’s slowing user growth. Well, this week, news broke that they had been in talks with Twitter for a $4 billion acquisition, so it looks like they’re still pretty desirable. This week, I’m talking about a story I published a couple days ago that highlights pretty much everything wild about the alternative asset world right now. If you’re reading this on the TechCrunch site, you can get this in your inbox from the newsletter page and follow my tweets @lucasmtny.

The big thing

Suppose you successfully avoided all mentions of NFTs until now. In that case, I congratulate you because it certainly does seem like the broader NFT market is seeing some significant pullback after a very frothy February and March. You’ll still be seeing plenty of late-to-the-game C-list celebrities debuting NFT art in the coming weeks. Still, a more sober pullback in prices will probably give some of the NFT platforms serious about longevity a better chance to focus on the future and find out how they truly matter.

I spent the last couple of weeks chatting with many people in one particular community — one of the oldest active NFT communities on the web called CryptoPunks. It’s a platform with 10,000 unique 24×24 pixel portraits, and they trade at truly wild prices.

This picture sold for $1.05 million.

I talked to a dozen or so people (including the guy who sold that one ^^) that had spent between tens of thousands and millions of dollars on these pixelated portraits, my goal being to tap into the psyche of what the hell is happening here. The takeaway is that these folks don’t see these assets as any more non-sensical than what’s going on in more traditional “old world” markets like public stock exchanges.

A telling quote from my reporting:

“Obviously, this is a very speculative market… but it’s almost more honest than the stock market,” user Max Orgeldinger tells TechCrunch. “Kudos to Elon Musk — and I’m a big Tesla fan — but there are no fundamentals that support that stock price. It’s the same when you look at GameStop. With the whole NFT community, it’s almost more honest because

Nobody’s getting tricked into thinking there’s some very complicated math that no one can figure out. This is just people making up prices, and if you want to pay it, that’s the price, and if you don’t want to pay it, that’s not the price. Shortly after I published my piece, Christie’s announced that they were auctioning off nine of the CryptoPunks in an auction likely to fetch at least $10 million at current prices. The market surged in the aftermath, and many millions worth of volume quickly moved through the marketplace, minting more NFT millionaires.

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