Vignesh Sundaresan made headlines in March this year when he bought Beeple’s NFT artwork ‘The First 5000 Days’ for a staggering $69 million. Bloomberg reports that Sundaresan (who goes under the moniker MetaKovan) has stated that anyone looking to profit from NFTs is taking on a “huge risk”.
In a video interview, Sundaresan commented on the risks involved in investing in non tangible tokens, saying that it was even riskier than investing in cryptocurrencies.
“I don’t think NFTs will hold the same kind of hype forever around high-value items,” he said. “The market will get divided. There will be very few high-value items and an infinite number of very low-valued items.”
While this view may seem to contradict his recent actions and purchase of Beeples’s NFT, the cryptocurrency entrepreneur states that his intention was to support the artist and showcase the technology.
Others have commented on the actions of the entrepreneur and his involvement in the Beeple NFT as a way to raise the prices of his existing NFT positions as well as his B.20 tokens. Sundaresan denies this, and states that he has not sold any of his personal B.20 tokens.
A token created by Sundaresan - the B.20 token , provides a “shared ownership of an open art project” (including work by Beeple) dropped from $23 to US$7 following Christie's auction for ‘The First 5000 Days’.
With the hype surrounding NFTs still very much around, the boom of these tokens may very well have passed. According to Nonfungible.com, the average prices for NFTs have fallen 70% from their peak in February. If hype dies down then losses will increase, and given that anyone can create an NFT, the scarcity of each piece is no guarantee of its value.
In the meanwhile, the risks are worth it to many people who look to profit from NFTs, and it certainly hasn’t stopped a series of high-profile NFT platforms that will be launching this year.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.