What is a blue chip NFT?
June 01, 2022
As you explore the wide world of NFTs, you'll hear the term "blue chip" quite a bit. And if you are an NFT collector or investor, you should know what a blue chip NFT is and why they are so important.
A blue chip NFT is generally well-known, established, stable and considered a good long-term investment. Blue chip NFTs are also considered a safer investment than most and have a proven track record of growth and appreciation.
In this article, you will learn what exactly a blue chip NFT is and why they are important, especially if you are considering a long-term investment in NFTs.
The term "blue chip NFT" originated in the financial world. In the real life, a blue chip bet, stock, bond, etc. means an asset that you can invest in for the long term. This is because you will enjoy an unchanged flow of income from the investment for years to come.
Similarly, Blue Chip NFT means a non-perishable token that you can safely invest in. This is because the appeal or value of this NFT will not fade soon for the people on the blockchain. Instead, it will only increase over time.
NFT projects that promise long-term returns are called blue chip NFTs. If someone invests in these NFT projects, they will likely make a nice profit when they sell them in the future.
Etymologically, blue chip has its origin in poker. In three color, the chips are usually red, green, and blue. During a game, this blue chip has the highest value compared to the other colors.
If we look at the traditional world, current examples of blue chip companies are Costco, Coca-Cola, Amazon, Apple, Tesla, TATA, Reliance and others.
If you have money and these companies are willing to sell their shares, you can invest in them and logically hope to profit in the long run without worrying about losing your investment.
In the world of NFTs and digital finance, the case is the same. NFT projects like Crypto Punks, Bored Ape Yacht Club, Cool Cats, and VeeFriends allow you to participate in their ventures, which means you can safely invest some cryptocurrency and have a rational prospect of success in the coming future.
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TradFi is all about longevity with blue chips, but that just doesn't exist with NFTs.
At least not yet.
Th OG NFT project are CryptoPunks and they have only been around since 2017. The most successful NFT project to date, Bored Ape Yacht Club (BAYC), has only been around since April 2021. So when the term "blue chip NFT" is thrown around, what does it actually mean?
In general, the term "Blue Chip NFT" means that the project will retain a high value well into the future. Put differently, it will act like a traditional blue chip stock in the future.
Since hundreds of projects have come to market since the NFT explosion in the spring of 2021, and more are coming every day, it is impossible to keep track of them all.
In the discourses on each project, you are likely to find at least one owner tweeting that this NFT will achieve 100% blue chip status. It's safe to say that the majority of these people are completely wrong and that their project won't show up in the cryptoslam.io rankings anytime soon.
So how can you know if a project will be a blue chip or not?
If you're looking for an absolute answer, you've come to the wrong place.
NFTs are great, but they're also incredibly risky, and it's impossible to predict how they'll perform as an asset class over the next decade and beyond.
People spend countless hours researching projects, buying and selling on marketplaces like OpenSea and Rarible, and getting into heated Twitter debates about whether or not a chubby penguin will outperform a lazy lion. (Disclaimer: We have no idea).
Everyone is trying to beat the market and make an NFT bet that will allow them to retire on a beach in the Metaverse before 2025.
We are now entering the era of amateur NFT fundamental analysis.
Hopefully, in a few years, the market will still be strong and we will be able to see who was correct in their investment theses and advanced the field of NFT analysis.
But until then, we'll have to be content with looking at what factors the market consistently evaluates when making a "blue chip" statement.
Those factors are:
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There is one clear difference between blue chip NFT projects and blue chip companies in the physical world, and that is in the nature of the companies.
Blue chip NFT brands are not really much different compared to the traditional companies we know and love today. The only thing that differs is the technology platform and the form of investment, but the standards that make up a blue chip brand are the same for NFTs and publicly traded companies.
Typically, blue-chip listed companies have been operating for quite some time. These companies have established themselves in society and their social influence has a great impact on the people who want to buy their shares.
Blue Chip Brands - BAYC, CryptoPunks, Cool Cats, VeeFriends in comparison to Apple, Coca-Cola, Walmart and Visa.
On the contrary, most blue chip NFT projects are comparatively new. This is not surprising because NFT technology is also relatively new.
One of the best-known NFT projects of recent times, for example, is the Bored Ape Yacht Club. However, that one has only been around since April 2021. One of the "older" successful projects, Crypto Punks, is no older than 2017.
So people are investing in blue chip NFTs based on forecasts. Those who have been in the world of cryptocurrencies and NFTs for quite a while can make such predictions based on their experience and apply logic. You too can do the same. We will take a look at it in the following section.
You can compare investing in NFT tokens to how people invested in Internet stocks in the early 2000s, when most of those stocks ended up being worth zero dollars. That's why I believe 98 percent of NFTs are bad investments.
Some of the leading blue chip NFT projects of recent times are CryptoPunks, Cool Cats, Bored Ape Yacht Club and VeeFriends. There are also many new and upcoming projects with great chances of success.
High-profile NFT brands: VeeFriends, CryptoPunks, Bored Ape Yacht Club, Cool Cats.
CryptoPunks is possibly the most famous NFT project of our time. Some people like Jay-Z are using these NFTs as their profile pictures on social platforms. CryptoPunks use a random variant generation model to create their characters. This naturally makes some characters more unique than others and prices them according to their rarity.
The Bored Ape Yacht Club is currently the rage in the Web3 world. This is mainly because they have teamed up with other well-known brands such as Rolling Stone and Adidas, to name a few, which has further solidified their blue-chip status. Currently, an NFT from BAYC is worth about three hundred thousand dollars.
In addition to these leading projects, there are other promising projects such as Art Block, VeeFriends, and many others that are already in the early stages of building brands in the NFT space.
So, if you are thinking of investing in a blue-chip NFT, you should spend some time in the market and always do your own research. Otherwise, you might make a wrong investment or even fall victim to a scam.
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