NFT vs Cannabis, best investment opportunities in 2022
NFTs have been popular this year. Digital artwork has been steadily increasing in price and a number of stocks in the NFT industry have shot up in price. One more industry that has a lot of potential is cannabis. It’s been controversial, but it also has the potential to be more widely accepted over time as its benefits become clear.
Depending on your perspective, one of these sectors might seem more promising. But which one presents the better investment opportunity for 2022?
The rise of NFTs
The NFT market is huge and the potential to grow is enormous. You can digitize anything- whether it’s a tweet, baseball card, or painting, you’re contributing to the digital revolution. JPMorgan Chase estimates that each month, digital art products generate $2 billion in sales.
Every day, more and more people are turning to art to express themselves. Digital art products are revolutionizing the creative industry with their affordability, availability, and ease of use. With so many companies providing these products at affordable prices, anyone can find something to express themselves regardless of skill level or budget.
JP Morgan predicts that by providing more marketplaces for assets with low liquidity, the NFT universe will grow rapidly over time. This is because it can help to solve the problem of acquiring hard-to-pick items. According to estimates, sales of Non-Fungible Tokens (NFTs) could be worth $17.7 billion by 2021.
As Non-Fungible Tokens (NFTs) grow in popularity, they will become more liquid and easier to trade. There are already quite a few marketplaces out there, and OpenSea is one of the most popular ones for buying and selling digital items. You can also create your own NFT.
There are not many NFT stocks with real-life momentum, but there is a new ETF building on the success of the crypto boom. The Defiance Digital Revolution ETF (NFTZ) now has an additional focus on blockchain stocks.
Cannabis, is it?
Marijuana-related stocks have a history of big swings in value, but this can be worth it because you could make significant returns. Marijuana is still illegal at the federal level in the U.S., which makes it difficult for companies to fund their business. The cannabis industry is much more developed than the NFT market, so it’s easier for multi-state operators to grow their businesses. Financial services are also available for them, despite some challenges which are related to its illegality in most of the country.
The best example of this is Trulieve Cannabis, which has projected $1 billion in 2019 revenue and over $125 million in profit. The growing legalization of marijuana across the country and countries means that there’s more room for Trulieve and other cannabis producers to expand their operations. Markets & Markets estimate that the global cannabis market could grow to be worth more than $90 billion by 2026, and their projection is an annual compound growth of 28%.
But if you’re not willing to invest in a producer, you can buy shares of a REIT like Innovative Industrial Properties instead. It provides space to pot companies and pays out yearly dividends. There are also pick-and-shovel plays such as Agrify and GrowGeneration who supply marijuana producers with the tools they need to grow their crops.
Confused? Which is better?
NFT’s are notoriously hard to judge, which means you can’t be sure of how much they’re worth. Physical artwork is tricky enough to value let alone digital versions. Cannabis offers a steadier investment option because you can actually invest it. As the NFT market continues to grow and become more popular, there will inevitably be more and more risk for those looking to invest. The safer option would be to invest in the cannabis industry.
One should also look at how NFTs will drive the trend in the metaverse and it can be the biggest theme in the next decade.