Should you invest in NFTs or cannabis stocks in 2022?
NOTOn-fungible tokens (NFTs) have grown in popularity significantly this year. Digital works of art have sold for millions of dollars and investors have bet on NFT shares. Another industry with great long-term potential is cannabis, which remains illegal in most parts of the world.
These two sectors have interesting growth potential. But which one is the safest and which is the best investment as the new year approaches?
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The case of TVN
The NFT market has the potential to be huge, with just about anything digitized, whether it’s a tweet, a baseball card, or a piece of art. JPMorgan Chase estimates that each month, these digital art objects generate $ 2 billion in sales – five times the $ 400 million they brought in at the start of 2021.
The largest bank said: “By creating markets for illiquid assets such as digital art, collectibles, music, games and other assets, the NFT universe is sure to continue to grow strongly in the world. over the next few years, as it helps solve the problem of by injecting liquidity into naturally illiquid assets such as collectibles. ”Cointelegraph estimates that NFT sales could reach a record 17.7 billion dollars. dollars in 2021.
As NFTs become more common, they will become more liquid, making it easier to buy and sell. There are many marketplaces, with OpenSea being one of the most popular for buying and selling digital items. You can also create your own NFTs to sell on these platforms.
There aren’t many NFT stocks yet, but a new exchange-traded fund, the Challenge ETF Digital Revolution (NYSEMKT: NFTZ), launched this month and focuses on blockchain, crypto, and NFTs.
The case of cannabis
Like NFTs with their volatile fluctuations in value, cannabis stocks are by no means a risk-free investment. Marijuana remains illegal in the United States at the federal level, making it difficult for companies to raise funds to finance their growth. Multi-state traders cannot trade on major stock exchanges and accessing banking services is a challenge. Despite these obstacles, the sector has been able to develop. The cannabis industry is much more evolved than the NFT market, so there are plenty of other ways for investors to gain exposure.
Investors can buy shares from a first cannabis producer such as Trulieve Cannabis, which is not only on track to generate over $ 1 billion in revenue next year, but also profitable. And with the continued growth of the industry as more states and countries allow the use of marijuana, Trulieve and other cannabis producers have more room to expand their business. Markets and Markets analysts predict that by 2026 the global cannabis market could be worth more than $ 90 billion, with compound annual growth of 28% until then.
And if investing in a producer is too risky for you, you can buy shares of a dividend-paying real estate investment trust such as Innovative industrial properties, which only leases space from potty companies. There are also pickax and shovel parts such as Agrify and GrowGeneration that provide marijuana growers with the tools and solutions they need to grow their crops.
What is the best?
NFTs are highly speculative in nature and it can be difficult to determine how much a digital item is worth. The physical paintings are difficult enough to assess, let alone the digital versions. Cannabis offers the most stable investment option because you can invest in businesses that are already generating cash and profits, and it’s easier to see how and why the business will grow in value. With NFTs, there are a lot more risks and uncertainties involved. You might get lucky and make a profit buying and selling an NFT, but the safest option for 2022 is undoubtedly to invest in the cannabis industry.
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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. David Jagelski has no position in any of the stocks mentioned. The Motley Fool owns and recommends GrowGeneration Corp, Innovative Industrial Properties and Trulieve Cannabis Corp. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.