Raoul Pal, CEO and co-founder of Real Vision, believes that NFTs will behave akin to “quality assets” in the traditional economy, outperforming the ether (ETH) cryptocurrency market during market booms.
In an hour-long YouTube video on Feb. 20, the former JPMorgan CEO summed up his most bullish views on NFTs, including key use cases for the asset class, the underlying technology and its potential in comparison to NFTs. Behave ether.
Just as “quality assets” tend to outperform the market during “economic recoveries,” the same will happen for certain NFTs during cryptocurrency boom cycles, Pal said.
“Yes, I can put my ETH in a JPEG, which is a kind of NFT. But why? Well, because like high-quality assets, think of CryptoPunk as high-end real estate 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 luxury real estate.”
“And it tends to outperform other markets. I think the same thing will happen in the ETH economy,” Pal added.
He emphasized that major collectibles like CryptoPunks and Bored Ape Yacht Club (BAYC) have become a status symbol in the crypto community, in the same way that owning a mansion, car or an item of a well-known brand allows him to join an exclusive club.
He said NFTs are “a way to own assets in the ETH economy.”
“Humans are ridiculous, we like to send social signals to things.”
Looking back, the former hedge fund executive said NFTs first came to his attention in 2022, when he began to “understand what their power is and what they can do,” such as their transfer via blockchain and automated smart contracts. The ability to “value”.
He also pointed to the use of NFTs in the settlement of contracts, noting that blockchain-based ledgers can provide verifiable transparency to agreements made between people, while smart contracts can basically eliminate unnecessary third parties.
“Now, the cool thing about the smart contract element of NFTs is the fact that it allows the settlement mechanism to be automated in the code and settle without a third party, so you don’t need courts. Judges, lawyers, notaries and accountants.”
Pal claims that since entering the NFT market, he has allocated about 10% of his ETH holdings to “premium NFTs” such as CryptoPunks and BAYC NFTs.
He also said the upside potential of such collectibles may outweigh the downside risk, as they always try to maintain a stable level of value during bear markets. He also believes that the price of ETH may rise in the short term.
“When you look at the price of CryptoPunks and Bored Apes, they are still very stable against ETH. Yes, they have peaked and come back, they have been trading at around 65 ETH. To me, this is interesting because They didn’t drop much. They spiked in June when the bankruptcies that rocked the coin village happened. But other than that, they just bounced back and stayed at 65 ETH. So whatever ETH does, they’ll reflect that. “
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As reported by Cointelegraph