Neymar loses R$ 5 million with NFTs; worth the risk?

Today one of the biggest stars of international football, Neymar has already lost BRL 5 million since he entered the world of cryptocurrencies and bought NFTs (non-fungible tokens, its acronym in English) from the Bored Ape Yacht Club collection, one of the most expensive in the world. .

The athlete acquired BRL 6.48 million in January this year and, today, the devaluation of the ethereum digital currency, used to trade the tokens, made the player’s NFTs reach the value of BRL 1.45 million.

According to the platform investing.comwhich monitors international financial markets, the ethereum has accumulated a devaluation of 72% since the beginning of the year. THE cryptocurrency plummeted amid the cycle of high interest rates by the central banks of the world’s main economies.

The central bank of the United States, for example, was one of the institutions that followed this path. Since March of this year, the Fed (Federal Reserve) has started a cycle of interest rate hikes and, since then, the bank has already made three successive rate hikes – the sum of these hikes already reaches 1.5 percentage points, with the increase most recent was 0.75 point.

But what are NFTs?

From English non-fungible token, NFTs or non-fungible tokens are unique, like real works of art. Unlike fiat money (euro, dollar and real), which is a fungible good, a rare work of art is a non-fungible good — that is, no other items are the same and therefore cannot be replaced by others of the same kind. species. Precisely because they are unique they are so valuable and desired.

Although they have already been the subject of interest from other celebrities such as Justin Bieber, Snoop Dogg, Mick Jagger, the purchase of NFTs requires care, as they are considered risky assets due to high volatility.

What risks are involved?

In addition to the loss of money itself, one of the main risks in the purchase of NFTs is the fact that the Brazilian market has not yet regulated this type of business objectively. In practice, this means that it is not clear what the rules for these negotiations are. Because of this, the purchase of tokens is considered delicate by experts.

Another factor that must be considered is the high supply of NFTs, which has contributed to the fact that the value of these virtual items tends to be zero in the future. The reasoning follows the same logic that applies to any other market: the more goods available, the less rare that good becomes, which implies a drop in its price.

Is it possible to make a lot of money with NFTs? Yes, but it is also possible to lose money to the same extent, since the tokens do not have such clear backing and it is difficult to determine a fair price for an NFT, as well as to pin down which illustrations have a high potential for appreciation.

About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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