Crypto billionaire Sam Bankman-Fried says NFTs are shooting into the mainstream despite investors having no idea what they're holding
NFTsare exploding in popularity faster than buyers are able to recognize their potential, Sam Bankman-Friedtold CNBC.
- "Most people getting in don't know what it's going to look like," the founder of
- He said excitement around NFTs could lead to huge adoption, or leave investors bitter if there's a crash.
Crypto billionaire Sam Bankman-Fried said non-fungible tokens are going mainstream faster than anything he's seen, but most people who own them don't know what the future for those digital assets could be.
"I still think that most people getting in don't know what it's going to look like, and frankly, you hear that from a lot of players," the 29-year old told CNBC's "Street Signs Asia" in an interview released Tuesday.
Bankman-Fried, the founder of crypto trading company Alameda Research and crypto derivatives exchange FTX, said he's heard of clients wanting to get involved in NFTs. But when those clients are asked what they want to do with the tokens, they say, "We don't know."
NFTs are unique digital assets that can represent anything from drawings to music, and are stored on blockchain technology. This means that when you buy an NFT, the record of your purchase is noted on a digital ledger forever.
These tokens are revolutionizing how artists and content creators can showcase or sell their work. Payments card giant Visa said Monday it had bought a CryptoPunk, one of the few first NFTs on the scene, for $150,000, or 49.5 ether.
"It's almost going mainstream faster than the mainstream understands what it is they're adopting, which is a weird phenomenon," Bankman-Fried said. "It could lead to just incredibly fast and giant adoption. It could also lead, frankly, to sort of a sour taste in people's mouth if there's a crash, and no one ever quite figured out what it was."
Trading volumes of top NFT collections such as CryptoPunks, Bored Ape Yacht Club, and Meebits have surged by over 300% in the past month, according to a Galaxy Digital report, citing data from DappRadar. This upswing is attributed mainly to the success of play-to-earn games, and to the rise of NFTs as a store of value.
"I'm not going to say people haven't made money buying them - they have," Bankman-Fried said. "Certainly people have made money selling them. That would be one way to get into the game if you can understand what it is that makes them desirable."
He added that NFTs are an undeveloped "nascent space," and there's immense uncertainty about what direction it could take in the medium to long term.
Read More: The CIO of a $1 billion crypto index fund that's returned 354% over the past year shares 2 reasons why he's 'extraordinarily bullish' on ethereum - and explains his outlook for rival tokens Cardano and Solana
- Abnormal surge in natural gas prices is hurting tea sector, says North Eastern Tea Association
- Google and Samsung join forces to help Android developers sync fitness data between apps seamlessly
- Elon Musk responds to a user saying he and his wife are bots as Twitter drama continues
- Mandate spinning mills to declare cotton, yarn stocks, requests Tamil Nadu Chief Minister to PM Modi
- WhatsApp beta reveals rich link previews to display link details in status updates