For Those Who Believe The Run in NFTs Isn’t Over, This Stock Is Intriguing

The NFT space is one that’s burgeoning with excitement today, and Currency Works (TSXV:CWRK) is one way to play this sector in Canada.

| More on:
sad concerned deep in thought

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

The Non-fungible token or NFT market is still attracting a lot of attention. Yes, sentiment appears to be waning somewhat from the NFT peak we saw earlier this year. Despite rapid growth in the volume of NFTs offered of late, average selling prices have come down considerably of late.

However, seeing various NFTs selling for multi-million dollar price tags has certainly invited a lot of interest in this nascent space. I think we’re still in the very early innings of this speculative mania right now. Accordingly, investors intrigued by the potential in this space may be enticed to dip their toe in today.

Here’s what investors may want to know about NFTs, for those looking at this space for the first time.

Non-fungible tokens 101 

An NFT is a unique digital token that can be bought or sold on the blockchain. These tokens are one-of-a-kind and come with a certificate of authenticity. Contrary to other cryptocurrencies that are fungible, for example, Bitcoin, they are not mutually interchangeable. NFTs can cover almost anything in the digital universe.

NFTs typically take the form of digital artwork, video clips, tweets, GIFs, etc. Recently, Twitter CEO Jack Dorsey, sold his first tweet for a whopping $2.9 million. The iconic Nyan Cat GIF created by Chris Torres went for $600 million. Accordingly, the value ascribed to these NFTs aligns with the rarity of said digital item, as well as supply and demand.

This is still a very new space, and remains highly speculative. However, the collectible nature of NFTs makes these assets intriguing prospective investments for hyper-growth investors today.

How does one invest in NFTs?

For sophisticated investors who understand how cryptocurrencies and the blockchain work, holding NFTs in a digital wallet is one option. That said, a growing number of publicly-traded companies now offer exposure to NFTs. For the less-sophisticated investor looking for leverage to this trade, this may be the better way to go.

An example of one such company on the TSX is CurrencyWorks (TSXV:CWRK). This company is listed on the TSX Venture Exchange and has become increasingly popular among the NFT crowd. In fact, this stock has skyrocketed more than 200% since the beginning of the year amid growing interest in NTFs. That said, this stock still trades at a 40% discount to its peak, which coincided with the peak in NFT mania.

My take on this space is that it remains highly speculative. Those looking to put a small amount of capital to work in this sector should feel free to do so, and CurrencyWorks is one option. However, I wouldn’t bet the farm on this one. I’d caution investors to practice prudent position sizing with such speculative plays in their portfolio at all times.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Tech Stocks

young woman celebrating a victory while working with mobile phone in the office
Tech Stocks

2 Beaten-Down Growth Stocks You’ll Be Happy You Own in 2032

Buying these oversold TSX stocks could make you rich by 2032.

Read more »

shopping online, e-commerce
Tech Stocks

Shopify Stock: Could it Reach $100 in 2022?

Shopify stock (TSX:SHOP)(NYSE:SHOP) has seen a huge uptick in daily trading volume, with shares up 28% in the last month.

Read more »

money cash dividends
Tech Stocks

Got $1,000? Buy These 4 TSX Stocks in Bulk!

These four TSX stocks are rebounding already, and offer a substantial opportunity for long-term Motley Fool investors.

Read more »

A stock price graph showing growth over time
Tech Stocks

3 Cheap Growth Stocks to Buy Right Now

Given their growth prospects and cheaper valuations, these three TSX stocks could deliver superior returns in the long run.

Read more »

Overhead shot of young adults using technology at a table
Tech Stocks

3 Stocks I’m Buying During a Tech Stock Correction

Tech stocks like Constellation Software (TSX:CSU) should be on your radar.

Read more »

financial freedom sign
Tech Stocks

$5,000 Invested in These 3 Stocks Could Make You Rich Over the Next 20 Years

Are you looking for stocks that could carry your portfolio over the next 20 years? Here are three top picks!

Read more »

potted green plant grows up in arrow shape
Tech Stocks

This Growth Stock Rallied 20% Yesterday, But it’s Still Cheap!

This growth stock is a great value. The 20% rally indicates the company has executed well and has potential for…

Read more »

Target. Stand out from the crowd
Tech Stocks

Down 70%, This Could Be the Best Stock-Split Stock in Canada to Buy and Hold Forever

This is arguably be the best stock-split stock to buy right now, as it has the potential to multiply your…

Read more »