The JPEG hype is real. Wait, I mean NFTs. NFT investing has become one of the hottest market trends of this year. NFTs are one-of-a-kind digital assets designed to represent ownership of online items like rare art or collectible trading cards. They aren’t fungible, meaning you can’t exchange one NFT for another like you could with bitcoin and other cryptocurrencies.
Sales of such NFTs have boomed this year. The NFT market topped $10 billion in transaction volume in the third quarter of 2021. Notable purchases include the $70 million someone shelled out for a digital collage made by artist Beeple, and the nearly $3 million another person paid for Jack Dorsey's first-ever tweet.
Naturally everyone wants in on the action, from celebrities such as Tom Brady to Reese Witherspoon, everyone is jumping on the bandwagon.
Coinbase announced it is also launching a marketplace for NFTs. Users can sign up to a waitlist for early access to the feature. It would pit it against the largest NFT marketplace, OpenSea, that recently admitted to insider trading.
Short Squeez Takeaway: The NFT market might only be heating up. Daily sales peaked at around $268 million on Aug. 28. It could also bode good news for Coinbase stock, which has struggled since it IPO'd in April, down ~30% from its all-time high of $342. NFTs will allow it to diversify its revenue that is currently heavily reliant on exchange fees.