The rise of the non-fungible token (NFT) market is increasingly becoming a reality. In 2021 alone, more than $23 billion was moved into NFTs.
NFTs are unique items that represent ownership over a digital asset. Many people buy NFTs to belong to a community such as the Bored Ape Yacht Club, for example. Also, the valuation of certain NFTs creates investment opportunities for many.
Thus, companies that have growth initiatives focused on NFTs can benefit greatly from this growing market.
Here are two NFT-related stocks that could be good investments in 2022.
(Read more from Wall Street Memes: Beyond AMC and GME: Meme ETF’s Top Stocks for February)
1. Coinbase
Coinbase (COIN) shares have underperformed in recent months. But for 2022, the crypto broker is counting on new initiatives to accelerate growth. Among them, within its subscription and services segment, Coinbase will count on the debut of its new NFT marketplace.
The launch of its NFT platform is near, according to the company, and it expects that the partnership with Mastercard will facilitate the purchasing process for users via credit cards.
The NFT marketplace will probably launch in early-to-mid 2022. Coinbase already has more than 2 million subscribers to its NFT marketplace and will first offer Ethereum-based NFTs.
The launch of Coinbase’s NFT platform should be a strong catalyst for the stock during 2022. Buying the stock at current levels may be a good deal. Coinbase shares are down more than 40% from their historic peak in November 2021. Wall Street has a strong “buy” consensus for the stock and implies an upside of over 80% for the stock over the next 12 months.
2. eBay
Online e-commerce platform eBay (EBAY) – Get eBay Inc. Report, announced in May 2021 that it would start hosting NFT sales. On the plus side, the company is trusted by millions of users and offers a purchase guarantee.
Figure 2: eBay hosting NFT sales.
Cointelegraph
But there’s a challenge to holding NFT transactions on eBay: The company currently accepts only credit cards or PayPal as payment.
Since the announcement of its NFT marketplace, eBay has given few details about the business figures so far.
eBay shares hit all-time highs at the end of October 2021 after reporting earnings results exceeding expectations for five consecutive quarters.
However, revenue guidance given by the company that said fourth-quarter results will come in slightly below estimates has put pressure on the stock, which has already fallen more than 25% from its all-time high.
Investors are expecting possible updates related to NFTs in the next earnings report on February 23. In addition, eBay Investor Day on March 10 may give investors more clarity on the issue and may be a stock mover.
Bonus: OpenSea
Currently the most popular and largest NFT marketplace is OpenSea, which has been called “the eBay of NFTs.” With more than 600,000 users and offering more than 34 million NFTs, the company is attracting attention due to its rapid growth. However, OpenSea is currently privately held — it’s not possible to invest in it via the stock market.
Figure 3: OpenSea NFT marketplace.
OpenSea
OpenSea has captured 97% of the NFT market. Data from OpenSea regarding revenue shows that it generated a whopping $76 million in August 2021 alone. Taking into consideration that the NFT market is already worth more than $1 billion, that indicates great potential for OpenSea, which is already valued at a market cap of $1.5 billion.
According to Brian Roberts, OpenSea’s CFO, the company looks a lot like eBay did when it started up in 1995. He also hinted that OpenSea may soon be publicly listed:
“I’ve seen a lot of P&Ls (profit and loss statements), but I’ve never seen a P&L like this… When you have a company growing as fast as this one, you’d be foolish not to think about it going public. It would be well-received in the public market, given its growth.”
Stay tuned.
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)
