NFTs have repeatedly succeeded in making headlines over the past couple of years. In 2022 alone, trading in the NFT market spiked by a whopping 21,000% and hit $17.6 billion. In addition, many renowned brands have hopped on the NFTs craze, expressed their interest in them, and have made serious moves to invest in this sphere. How you can gain exposure to them?
What Are NFTs?
NFTs or Non-Fungible Tokens are cryptographic assets that digitize real-world objects. In other words, NFTs take tangible and non-tangible objects that are often encountered in real life, like real estate, music, GIFs, collectibles, avatars, designer sneakers, clothes, art, in-game videos, and even tweets, and turn them into digital assets; the possibilities are endless.
The digital assets are then usually traded online and are often purchased and sold using cryptocurrencies.
Generally, while NFTs are supported by blockchain technology like Bitcoin Cash and other cryptocurrencies, they mainly run on the Ethereum blockchain and are often paid for in crypto. However, while NFTs are also decentralized, the two don’t have any further similarities.
While cryptocurrencies are fungible and can be exchanged for one another, NFTs, as their name suggests, are not. This means that while you can replace one Bitcoin with another as it can retain the same value, NFTs cannot be traded for one another or duplicated. This is because each NFT has a personalized and special digital signature that makes it hard to replicate. The digital signature is essentially proof of the authenticity of the NFT as each NFT creator can sign their NFT with their special signature and authorize it. For example, if someone intends to sell a copy of an NFT, it is highly unlikely that it will be sold because the NFT’s original owner did not authorize the copy. Unauthorized copies do not have the creator’s digital signature, and the digital signature is what shows its authenticity.
NFT-related Stocks and Indices
There are myriad access points available in the world of NFTs. One way to gain exposure to NFTs is through trading CFDs on the NFT Giants Index on the Plus500 platform. This index tracks the trajectory of several NFT-related companies like Activision Blizzard, DraftKings, Mattel, WWE, and more. Also, eToro's MetaverseLife Smart Portfolio allocates in stocks and cryptos, based on eToro's asset universe, of companies and platforms that are part of this revolution. This concept offers a well-diversified portfolio in distinct sectors, from the hardware used in augmented reality technology, the software that creates and interacts in the virtual world, and the crypto platforms that connect it. The minimum investment amount for this portfolio is $500.
Another means of gaining exposure to companies related to NFTs are trading CFDs on NFT-related stocks. You can trade CFDs on the companies that have adopted this relatively new technology. For example, in 2021, Coca-Cola released its first-ever NFT collectables to celebrate Friendship Day. The NFT raised $575,000 to benefit The Special Olympics International organization. Fast-food giant McDonald’s also has set foot in the NFTs and the Metaverse industries by launching its first NFT, celebrating its 40th anniversary in 2021.
Other companies that have embarked on the NFTs journey are Twitter, Nike, Coinbase, and eBay. Accordingly, one can gain exposure to the NFT world through trading CFDs on these stocks.