Twitters CEO Sells First Tweet as an NFT for $2.9M
By Dale Gillham |
As the world becomes more familiar with blockchain and cryptocurrencies, the opportunities that this new age technology presents keeps expanding at a rapid pace. In March, Twitter founder Jack Dorsey sold his first tweet as a non-fungible token (NFT) for $2.9 million. To put it in simple terms, an NFT is a unit of data stored on a digital ledger (known as blockchain), which certifies that digital asset as unique.
Excuse my ignorance, but I am not sure why anyone would want to buy a tweet as an investment, let alone pay nearly $3 million for it. I guess we will all find out in due course if the investment was worth it.
What are non-fungible tokens (NFTs)?
According to news.com.au, blockchain works by creating an open record of transactions that is nearly impossible to alter. Rather than storing data in a database, the data fills up “blocks” which are then linked to previous blocks that are all chained together. In other words, as new data becomes available, it is entered into a fresh block and once that block is filled, it is chained to the previous block in chronological order. Each block is valued equally and essentially an original one-off digital record that is authenticated using blockchain technology.
NFTs are purchased using cryptocurrencies and, so far, NFT collectibles (as they are known) range from digital paintings to artwork, music, games, films and even sports memorabilia. While collectibles can be a good investment, regardless of whether they are owned in their physical capacity or digitally, only one person can own an NFT of the original item.
It is possible that we will see an explosion in the sale of digital collectibles via blockchain in the coming years, as we all become more familiar with this technology. That said, I would recommend those who own collectibles and who may be thinking of using this technology to do their research to fully understand what they are buying and its true value.
What were the best and worst performing sectors last week?
Materials was the best performer up 3.92 per cent followed by Energy up 1.82 per cent and Financials up 1.76 per cent. The worst performing sectors included Information Technology down 10.51 per cent followed by Utilities down 1.03 per cent and Industrials down 0.94 per cent.
The best performers in the ASX/S&P top 100 stocks included QBE Insurance up 7.81 per cent on good news of increased premiums followed by OZ Minerals up 7.44 per cent and Worley Limited up 7.27 per cent.
The worst performing stocks included Appen, which fell 21.52 per cent last week on news of a downturn in advertising. This stock is now down over 70 per cent since August of last year resulting in many retail investors suffering heavy losses. Afterpay was also down falling 18.93 per cent and Altium was down 15.04 per cent.
What's next for the Australian share market?
In the 58 weeks since the COVID-19 low in March of last year, the Australian stock market has spent approximately 70 per cent of the time trading sideways combined with brief periods of very bullish upward movements. After breaking up again strongly in early April, the market has moved sideways over the past three weeks to be slightly down on where it closed four weeks ago.
Normally, it would be reasonable to expect the bull run to continue and, as I have mentioned previously, my expectation was that the market would rise to around 7,600 point over the coming weeks into mid to late May. However, given the significant decline with technology stocks last week, I think the only thing we can be certain of right now is that the market is uncertain and we need to be prepared for anything to occur.
I still expect the All-Ordinaries Index will be mostly bullish throughout 2021 and while it may move down in the short term, I don’t expect this to be severe in either time or price. What is unfolding right now is a timely reminder that the market does what it does and we can only control when we get in or out. This is why it is very important to have an exit strategy to protect your capital given what unfolded with Appen, Afterpay and Altium last week.
For now, good luck and good trading.
Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also author of the award winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good book stores and online.