All investing is about cash flows, whether they be a dividend, rent or an interest payment. If there are no cash flows or never a prospect of cash flows, it is not an investment. It can never be an investment.
So gold is not an investment. Art is not an investment. Crypto and NFTs are not investments. None of them will ever be investments because they’ll never produce cash flows.
I have lived through two big bubbles and have read about countless others but the mania post-Covid was something else. Only the 17th century Dutch tulip mania comes close.
But the tulip folks could be forgiven. They didn’t know nothing. There were no functioning capital markets with not much record of the bubbles past.
The NFT craze has since died down but how did we let these things (crypto included) morph into what they are today. Like someone cooks up a coin with a dog face and its market value is in the billions of dollars? I mean people are literally taking their taxes paid money and buying these things?
And what is the end game? To find another sucker that will buy your coin at a price higher than what you paid for it. That is the only way you profit until there are no suckers left.
There was this Beeple thing that sold for 69 million dollars. I can make a case that it could be of some value to someone. It was a collection of 5,000 days of that artist’s fantastically quirky art that he has been churning out for 14 years. That is amazing but investment is not.
Cover image credit – Pixabay