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- There exists a concept doing the rounds of a blue chip NFT
- The thought of blue chip denotes quality, standing and market dominance, among other activities
- No NFT project can be eligible for this epithet
There exists a concept floating about of blue chip NFTs that basically needs addressing. The idea shows that some NFT collections and the firms in it are suddenly better, safe and for that reason desirable than others, which in an area well-known for rampant speculation predicated on no fundamentals whatsoever is really a pretty rich concept. Lets look at why is a blue chip company and see precisely how far away the idea is whenever we discuss NFTs.
Exactly what is a Blue Chip Investment?
Investopedia defines blue chip because the following:
A blue chip stock is really a huge company having an excellent reputation. They are typically large, well-established, and financially sound companies which have operated for several years and which have dependable earnings, often paying dividends to investors. A blue chip stock typically includes a market capitalization in the billions, is normally the marketplace leader or on the list of top three companies in its sector, and is generally children name.
Lets take these points one at a time:
an enormous company having an excellent reputation
Needless to say, huge is really a relative concept so we cant really say much there, but for excellent reputation? Just how many NFT projects have excellent reputations? Do not require did anything to earn a trustworthiness of any sort yet, and arguably the largest included in this, Bored Ape Yacht Club, has attracted the attentions of Anonymous due to the alleged racist and Nazi dog whistles.
typically large, well-established, and financially sound companies which have operated for several years
We are able to hardly say that any NFT collection or the companies in it are well-established and we’ve no idea if they’re financially sound or not. Being temporarily loaded doesnt cause you to prudent together with your cash, and we’ve no chance of telling whether Yuga Labs and so on are employing their money sensibly or elsewhere.
So when for operating for most yearsthe level of fly by night rug pullers in the NFT space proves that longevity is definitely something to be cherished, then one that, obviously, only time can establish.
A blue chip stock typically includes a market capitalization in the billions
Well, that is a thing that we at the very least can say in NFTs favour in March this season it had been revealed that lots of of Yuga Labs projects have market caps of over $1 billion, ensuring they at the very least fit this criteria at the very least until their valuation drops.
The fluctuation in value of NFTs implies that even if an assortment suddenly does creep in to the billions, it hardly qualifies it for blue chip status it requires to stay there for quite some time and set up a base before we are able to consider it in that category.
is normally the marketplace leader or on the list of top three companies in its sector, and is generally children name.
Its questionable whether any NFT collection is actually children name. Plenty beneath the age of 40 could have heard about Bored Apes but many probably dont know any thing about them, so when for others? No chance.
For market leaders or top three in the NFT space, again we are able to only turn to Yuga Labs because of their Bored Ape franchise, but being the very best in a sector that barely anyone beyond your ecosystem understands probably covers about one in one thousand households.
Time Will Tell
While we cant apply the idea of a blue chip company to a blue chip NFT collection, we are able to see that it really is merely an effort to confer some type of legitimacy on certain projects whose valuations have stayed high through the bear market. Additionally it is a means for NFT holders to supply the sector an air of legitimacy that it simply doesnt have.
While that is laudable and speaks to an increased level of desire to have those collections, it ignores the less tangible elements that produce an organization blue chip reputation, standing, useability, penetration on the list of general population etc.
Until an NFT project achieves this, and stays around long enough to use, a blue chip NFT project is merely one which hasnt crashed in value just as much as the othersyet.