Don't Believe the [NFT] Hype

about buying collections like Boardy Club. Non fungible tokens aren't just pictures of monkeys, though, even if that's how most people understand them. They exist on the blockchain, and buying or selling them typically requires paying in some kind of cryptocurrency like Ether. But all the link between n f T prices and the prices of tokens like Ether isn't always straightforward. It's true that n f t s haven't been entirely spared from the chill of this current crypto winter.

For more on n f T s and how and whether they're holding up these days, I'm joined by Bloomberg reporta Pratana Pokash. N f T s fundamentally I mean, if you go back to the definition, is it's about a certificated ownership prota. Welcome. Yeah, thank you for having me. It's an absolute pleasure. We're gonna talk about n f T s. Why are we going to talk about n f T s. What's happening? Well, it is the hot topic.

It has been for a while, so there's just a lot to unpack over there, so I'm excited, excited to talk about it. Excellent. I was reading your story that you wrote for Bloomberg Quick Take, which I'd love for you to just tell our listeners a little bit more about what that franchise is, and a couple of things

jumped out at me that we will talk about. So you know, for sure, I want to hear your perspective on average n f T prices, how they're doing compared to the broader crypto markets in this so called crypto winter that we like to talk about on the podcast, and then you know, just a little bit of where prices are holding up. What that might be about. Right, Is it that there is this base of buyers that really have strong conviction and n f T s. Is

there something else going on with tokens? So we'll get into all those things. Tell me more about what quick take is, all right, So quick take are an explanatory type of I guess the pieces that we do at Bloomberg, which aims to unpack some of the bigger concepts, things that are happening in the world, or words that we end up seeing a lot in the news but don't entirely understand. So quick take helps break that down and explain it all from scratch, just so you understand. And

so there's no jargon there, there's no complications. You just take what it is and digest it in more platable language. As you were proporting this out, given everything that you've just said, what was like the hardest thing for you to explain about how n f t S work Probably the board apes, because I'm so struggling to understand what it's all about. And I think that's what the whole crypto world and the world of n f t s,

that's what it's been. I mean, it's been a lot of explaining and it's been a lot of redefining at various points in time. So yeah, it was quite a quite a learning for me as well. Now when you talk about board apes, so what we're talking about here is board Ape Yacht Club, which is probably still one of the single most successful, definitive coveted choose your adjective here collection of non fungible tokens ever to have been created. What about these n f T s in particular were

so interesting to people? Like? Were they expensive? Were they were were the exclusive? Was it some combination? It was exclusive and it was also something so different that people had never kind I've seen before. We saw a lot of celebrities buy into this trend. And what happens is you want to see a lot of public people, public personalities take two n f T s. It somehow lends it a legitimacy that everyone wants to be in on

as well. So I guess a combination of those things and and just this access to a more exclusive club just created a sense of hype because the moment you buy a board Ape, you you get access to a discord server specifically for members of this board Ape Yacht Club. And the discord server is like video games lack. Yeah, Yeah, that's how I think of it as well. I think that's the I mean, I can't imagine what must be going on in that chat but that's the closest I

can think of. But yeah, I think this, this whole sense of an exclusive access or special ownership is what got a lot of people interested in it. But what do you actually own? You own the anim nation of the board ape, so you get to customize it however you want, maybe put a blonde wig on the on the ape, or color the skin differently, or whatever it is that you want to do with it. But you just own the animation of that. And that's pretty much it. So does the Is the n f T the ape

or is it the right to own the ape? I want to say both, because n f T is fundamentally I mean, if you go back to the definition, is it's about a certificate of ownership. I guess that's the easiest way to put it. It's the ownership do that ape, I guess in this particular context. But if we talk about it more broadly, it's it's certificate of ownership for

any work of art, maybe even a tweet. Sometimes that's what you're really paying the price for, which is interesting because one of the in the in the sort of the earlier days of board ape, there were people who were trying to figure out do they own the rights to this particular print or do they actually own the underlying intellectual property of that ape? Would they be allowed to, say, turn that ape into a movie or you know, as a character, or print a line of T shirts associated

with it? And I think when we're talking about n f T s, one of the things that's always important is to remember that these are in addition to being apes and additions being certificates of authenticity or ownership, they're also contracts. And so with contracts you have, you know, parties to an understanding buyer, seller, creator, recipient, and then a bunch of jargon that defines what you, as the person who owns or has made that thing, can actually

do with that thing at the end of it. Have you found that people understand all of the legal ease that is sometimes associated with these things. Maybe there's a fraction of people who do, but I think a majority of people probably don't. I think there's a great deal of mob mentality attached to just this n f T market, because you see someone do it, and then you see someone who's super famous do it, and you want to do it as well. So I think that there's not

a lot of thought into this sometimes. Of course, I I want to completely credit all the investors have thought about this and their research, did their research and want to diversify their portfolio and decided to invest in n f t s. But of course there's a fair deal of buzz and and just like social you know, hype as they put it, um, So I don't think everyone is completely educated about the legal technicalities of it. Yeah,

I'm just gonna ask our listeners. If you're a person who owns an n f T and you have read all of the terms and conditions associated with that n f T as well as the platform that you bought it on, please email us. I was very interested in hearing from you and what that experience was like and how many years you spent in law school. Definitely, so if we were having this conversation seven or eight months ago, we would be talking about a very different vibe, right

we would. We would be the beginning, maybe the middle of the hype cycle. There would be people showing up on Good Morning America or the Today Show talking about their their n f T s. People would be trying to like your friends would be like, Hey, check out this really cool collection and you can get into it super early. Now we're having a little bit of a different conversation. We're having a conversation where it's like, how

prices have come down. There's still a degree of enthusiasm, especially among like certain artists, certain creators, But the sort of you know, Tom Brady with laser eyes pitching you on his n FT platform autograph energy of several months ago is not quite the same what's been going on. I think for this we need to maybe rewind a little to the Terra Luna collapse. How do you make up what's happened with Terra and what it says about

the future of quote unquote stable. I'm really curious about the responsibility of the tarot ecosystem now that so many people have lost money. Is it completely invest at your own will here or are there going to be chances to recoup some of these losses in any fashion they own action. First of all, this is a very bumpy story that we're looking at here right now. It's a stable coin and it's not stable. What is al risk for this stable coin as it looks to shore up

if pegged to the dollar? But the question is does the stable coin survive at the end. I guess n f T was pretty much got in that storm and it didn't have an escape from there. And what that crash did above all was that it shook investor confidence because it was unprecedented and it basically put the whole cryptosystem in jeopardy, or at least was perceived to put the whole crypto system in jeopardy because of that loss

of confidence. Yeah, definitely. It was one of the first really big holy shit moments where are allowed to swear on the podcast in this particular cycle of crypto um And what I mean my that is, you know a lot of people who owned tokens, whether Luna, whether Terror, whether others, and n f T s had not been in crypto a very long time, right, Like these were folks who came into the space three maybe five years ago.

They didn't have the memory of the previous time these things had happened, and so it really it rattled a lot of people. And we're still dealing with the fallout. We'll be right back with more from Bloomberg Reposa Protana. Now, the overall market has been in a pretty depressed state since then. In the aftermath of terror, Luna We've had the blow up of the Three Hours Capital Hedge Fund.

There's a lot of scrutiny and attention right now around regulation, what's going to happen with some of the big exchanges, Various big players in the space of filed for bankruptcy or are generally distressed. So the vibes, you know, the vibes are a bit more stressed. Our n f T is moving in the same direction as everything else, Like, is there anything about this part of the ecosystem that

is holding up or behaving differently? Yeah, I think n f t s have definitely suffered a little bit of a blow given everything that's happening in this in the broader crypto space. But that being said, there's still not like rock bottom. They haven't hit rock bottom yet. You still see n f t s grow in spaces that had previously not been explored. I think more recently we saw game Stop announced new marketplace for n f t s, which is I guess a new development and something that

everyone is interested in knowing how that kind of grows. Yes, especially because the timing it was a little bit challenging for definitely, and and so that calls to question whether n f T s are going to see the same kind of downturn that cryptocurrencies have probably seen. Your story also mentioned the fact that opens which for a while was kind of the biggest, buzziest, most successful n f T marketplace they were like kind of like an eBay for n f T s by volume, recently laid off

of their staff. You know, they said that they were generally making this decision to in full awareness of market conditions. Give me an example of how market conditions are and n f T s right now, like how our prices?

How are sales? Yeah? So I think in June sales were down on Open Sea, which, like you said, is one of the biggest marketplaces for n f T s um and when we look at the floor price, it was almost down, specifically for the board Aps Yacht Club, which at one point was soaring it upwards of food dollars. And when we talk about floor prices, we mean the kind of like the minimum listed price that something is currently available for sale. And n f T in this

collection is available for sale. Got it. So if you were a person who bought at K and you're hoping to sell at for entry K and now it's like ha, ha, it's worth ad k. You were having a very hard period. Yeah, I can't imagine what they must be going through, but I do. I do think they're holding on because there's hope for n f d s. There may be hope on what basis like why are where are people finding hope?

You see, n f T is being adopted in a number of different spaces, whether that's the metaverse, you know, the all famous metaverse, or gaming. We're also seeing a massive market in sports memorabilia, and so a lot of what we experience, anything that we see or can hold in our hands, can be made into an n f T today. The I guess the spaces that people can grow this market in. It just keeps expanding um each time something new comes up. That's certainly the pitch that

we've heard. You know, we had Nicola Julia, who's the CEO of so Rare, which does kind of fantasy sports with an n f T element on the platform. We just believe that an actually are the best feed for game it TEMs, but we are. We don't see the world nifty in our product like it's just the best technology. We've spoken to the CEO of Royal, which is an n f T platform for musicians. The most powerful aspect of it is again the ability to know authenticate ownership

of digital types of assets. And that's something that we really haven't seen in the past that we're going to

see a lot of development in the future. A lot of n f T c o s we've been to feed I'm finding um and they've you know, they've said something very similar, which is that we're just at the beginning, right and this this latest collapse is more about a shakeout in some of the more speculative applications maybe or the applications that aren't necessarily about collecting or not necessarily about access to real world experiences in the way that

you are describing it. Of course, they could all also be wrong, So you know, this is this is certainly going to be one of those stories that we're just going to have to continue to pay attention to and see what happens. Yeah, and I think that along with the laps that we were talking about, one of the things that may have also factored in was just the number of frauds in scams and allegations of insider trading that was just being thrown around in this n f

T and crypto space that I think was bound to eventually. Yeah, just just make investors reevaluate what they're putting their money into. Terrific. Well, thank you so much for being on the pod, Pratina, and it is a pleasure to get to work with you. Thank you so much, Thanks for having me. You can find more of Pratina's reporting on the Bloomberg Terminal, on

Bloomberg dot com or on Twitter. She is at prof per Cash that is p r A r t H p r a k A s H. On the next episode of Bloomberg Crypto, n f T is really leaped into pop culture prominence in but they've been around since at least two thousand fourteen, and despite current market conditions which aren't great, new tokens and collections are still being launched every day, including by luxury brands like Gucci and Prado.

Our next episode will feature a panel discussion that we recorded during the Bloomberg Live Crypto Summit that was held in New York in July. You'll hear from industry leaders like Avery Akin, Enya Vener three, Helen High of Finance, and digital artist People Pleaser sometimes known as Emily Yan. This is Bloomberg Crypto, a daily podcast from Bloomberg and I Heart Radio. For more shows from I Heart Radio, visit the I Heart Radio app, Apple Podcasts, or wherever

you get your podcasts. Send us your comments, questions, or suggestions for the show to Crypto at Bloomberg dot net or find us on Twitter We're at Crypto. The supervising producer of Bloomberg Crypto is Vicky ver Galina. Our senior producer is Janet Babin. Our producer is Sharon Burriro, associate producer is Ty Butler. Desta wonder At is our engineer. Original music by Lee Sidrin. I'm Stacy Mariashmal. We'll be back tomorrow. M