The first major cryptocurrency run that topped in December 2017 with bitcoin around $20,000 featured initial coin offerings (ICO). These were "altcoins" that could be bought with other cryptocurrencies that essentially were similar to stock in a startup. The hype in the ICO market contributed to the rise in bitcoin and its decline as most ICOs valuations burst like Internet stocks during the dot-com era.
This bull market in cryptocurrency, which started in March 2020 with bitcoin around $5,000 seems likely to be defined by non-fungible tokens (NFT). NFTs are essentially digital tokens for collectibles with the blockchain used to prove ownership.
Bubble or Breakthrough?
Many consider this to be a bubble driven by hype and greed, while others see this as a technological breakthrough. The recent high-profile transaction was for $69 million from the artist beeple who produces digital art.
Another example of the rising popularity of NFTs is NBA Top Shots which essentially sells ownership of 15-second highlights of players. Then, these highlights trade on a secondary market. In one sense, it seems absurd that someone would pay substantial sums of money that anyone can see for free on TV or YouTube. However, the same could be said for any painting or sculpture.
Another example is people selling tweets as tokens. Twitter (Nasdaq: TWTR) founder, Jack Dor...