NFTs will act as advanced real estate during boom cycles: Real Vision CEO
Real Vision CEO and co-founder Raoul Pal believes non-fungible tokens (NFTs) will function similarly to “high-end real estate” in the traditional economy, outperforming Ether (ETH) during boom cycles in the crypto market.
In an hour-long YouTube video published on February 20, the former JPMorgan chief provided an overview of what he felt most bullish about when it came to NFTs, including key use cases for the asset class, its underlying technology and its potential performance against to Ether.
Pal said that just as “capped real estate” often outperforms the market when “the economy recovers,” the same is likely to happen to certain NFTs during crypto boom cycles.
“So I can take my ETH and put it into a JPEG, an NFT. But why? Well, because a lot like high-end real estate and think about a [Crypto]Punk like a high-end property in London or New York or Hong Kong or wherever, when the economy starts to boom and people have more money, they tend to buy expensive high-end property.”
“And it tends to outperform the rest of the market. And I think the same thing will happen in the ETH economy,” he added.
He highlighted that large gatherings such as CryptoPunks and Bored Ape Yacht Club (BAYC) have become status symbols in the crypto community, much like owning a luxury house, a car or an item from a famous brand, which offers access to exclusive clubs, or what he called ” mini-network states’.
He suggested that NFTs act as a “way to own property in the ETH economy,” adding:
“People are ridiculous and we love to socially signal things.”
Looking back, the former hedge fund manager said NFTs began to draw his attention in 2022 when he began to “understand the power of what they are and what they can do,” such as being able to transfer “value” via blockchains and automated smart contracts.
He also pointed to NFT’s use in resolving contracts, noting that blockchain-based ledgers can offer verifiable transparency about what is agreed between people, while smart contracts can essentially do away with unnecessary third parties.
“What’s interesting about the smart contract element of an NFT is the fact that it sort of allows the settlement mechanism to be automated in code and resolved without the need for a third party, so you don’t need the courts, the lawyers, the notaries and the accountants.”
Pal stated that since getting into NFTs, he has allocated about 10% of his ETH holdings to “premium NFTs” such as CryptoPunks and BAYC NFTs.
Related: Nifty News: Yuga in the doghouse over Kennel Club logo, NFT marketplace wars rage on and more
He suggested that such gatherings potentially offer more upside potential than downside risk, as they have managed to maintain a decent level of value during the bear market. He also believes that the price of ETH is likely to increase going forward.
“When you look at the prices of Crypto Punks and Bored Apes, they have remained incredibly stable in ETH terms. Yes they had a blowout peak and they came back and they have been trading around 65 ETH forever. And it’s interesting to me because they didn’t fall much further. They had a sharp rise in June in the great crypto collapse. But other than that they have just bounced back and stayed at 65 ETH. So whatever ETH is doing, they’re just mirroring it,” he said.
