Investing in the NFT market continues to be the trend. In August, CNBC indicates that there is an investor who has paid 1.3 million USD for a digital work. Besides individual users, big businesses like Taco Bell, Pizza Hut or Pringles also launch their own NFT collections.
Visa joins the race with the purchase of a NFT worth 150.000 USD. Sports fashion company Adidas also spends 156.000 USD to enter this market. Experts say that the ambition to catch up with the trend and earn more revenue is the reason why big companies enter the virtual asset market.
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According to Attorney Tal Lifshitz, co-chair of the cryptocurrency and blockchain investment group Kozyak Tropin & Throckmorton (KTT) based in Miami, USA, it is understandable for big brands to invest in NFT.
“It is an interesting trend. At the same time, NFT is also an advanced technology, which has the potential to help these companies do business and interact with their users,” said Attorney Tal Lifshitz. Forbes.
“The popularity of NFT will increase its value and use exponentially. If you’re the only one who owns the phone, it doesn’t make any sense. If two people have a phone, it gradually comes in handy. If billions of people have smartphones, you must have one. That’s the future of NFT when it comes to popularity,” said Lifshitz.
Meanwhile, Lydia Hylton, an investor at Redpoint Ventures said that the ultimate goal when companies buy NFT is for profit. They see the potential of these virtual assets to increase revenue and expand customer-brand interactions.
“Luxury brands like Louis Vuitton thrive on product scarcity. They are releasing an LV-labelled NFT for the metaverse. These companies are always looking for ways to increase customer engagement.”
According to this investor, NFT can also be applied as a reward to encourage users to shop. At the same time, it is an innovative form of giveaway, offering limited access and other perks.
Join the future trend
Dr Dustin York, associate professor of communications at Maryille University, says that companies entering the race based on reality are spending more time in virtual worlds.
“When users gather at the mall, brands follow. When users shop online, the businesses are there. And when customers are focusing on Web 3.0, companies will sell NFT,” Professor Dustin York told Forbes.
Professor York believes that the NFT is in a period of “hype”, overdevelopment. He predicts that there will come a time when the value of the NFT will decrease significantly.
“NFT is trending right now, like e-commerce sites during the dot-com bubble. Virtual assets will gradually stabilize and become a part of our daily lives,” said Professor York.
Meanwhile, NFT investor Andrew Lokenauth thinks big businesses spend money on NFT because the metaverse is the trend of the future. According to Mr. Lokenauth, more and more people are spending time in the virtual world. Businesses that see a benefit from marketing in the metaverse should join soon.
Lokenauth points out that there are many famous artists like Justin Bieber, Travis Scott, the Weeknd or Ariana Grande holding concerts in the metaverse. “In the future, luxury fashion companies will hold shows in the virtual world. That’s why they’re spending big money,” the investor said.
Users must be careful with NFT
Despite big brands investing millions of dollars in digital assets, Forbes that new investors need to be careful with this field. The “virtual” aspect of the NFT is an opportunity for scams. For example, there are fake NFTs that are resold to less experienced users.
“Need to make sure that the NFT seller actually holds the work. The issues of digital copyright have not been resolved,” said Lifshitz, attorney.
According to Justin Giudici, Head of Product at Telos Foundation, this problem is not alarming because every market will have a fraudulent component. “Before buying any NFT, do your research on the property and make sure the seller is not a scam. When there is the participation of big brands, many people take advantage of the market going up to make profit,” Mr. Giudici said.
In addition, this expert believes that many platforms have not completed the verification steps, leaving many risks for investors.
Akbar Hamid, founder and CEO at 5CRYPTO, thinks that users need to have a clear understanding of how NFT, the cryptocurrency market on the blockchain, works. At the same time, mastering how to secure and use a digital wallet is also very important.