Mon. Jan 24th, 2022


The article by John Gapper (“The Bored Ape Yacht Club is past an NFT joke”, Opinion, 18 December) deals with non-fungal signs in the form of paintings, in this case digital images of monkeys dressed funny.

Gapper says an NFT collection was recently sold for $ 69 million. I suppose they can be squeezed out and placed on a wall. But then I got some original drawings by George du Maurier that appeared in Punch magazine in the 1890s. Each is worth about $ 600.

From what I have seen, NFT art is not of museum quality and therefore has little intrinsic value. The value of $ 69 million must, I suppose, come from expected sales values. Picassos are not quite the same because they have intrinsic and historical values, including Du Mauriers.

Is that then what it comes down to? Pure speculation? In finance, a stock’s price may deviate from its fundamental earnings-determined value in a rational speculative bubble. But bubbles burst and prices collapse to the fundamental value. Since NFTs have no earnings or historical values ​​and do not have much intrinsic value, it seems that the markets for them are rather driven by the larger foolish theory: “I am a fool to buy one, but not if “I am confident that I can do it. Find a greater fool than I am.”

I can only imagine that with so much poverty and disease in the world there should be better uses for gross domestic product than blowing NFT bubbles.

Paul Hallwood
Professor of Economics, University of Connecticut, Storrs, CT, USA



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