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Quarter of HNW investors considering NFTs

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More than a quarter of high-net-worth investors will include NFTs, or non-fungible tokens, in their portfolios this year, a survey by a leading financial advisory and fintech has revealed.

The poll, carried out by deVere Group, follows a build-up in momentum surrounding the new digital asset class.

An NFT is a digital asset that can be an image, audio clip or GIF and whose ownership is recorded on a tamper-proof digital ledger known as a blockchain.

Mercedes-AMG Petronas Formula One, for example, is launching the first in a series of NFT drops.

The team is introducing 11 digital art NFTs featuring Mercedes-AMG Petronas cars, created and designed by the artist Mad Dog Jones.  Three of them will be available for auction during the much-anticipated Miami Grand Prix this weekend.

The deVere poll shows that of the more than 450 HNW clients surveyed with more than £1 mln of investable assets, just over a quarter, or 26% said they are looking to include NFTs in their investments before the end of 2022.

“The buzz about NFTs, this exciting new digital asset class, is gaining pace,” said deVere CEO and founder Nigel Green.

“More and more investors around the world are understanding and valuing the potential of NFTs, as major sports franchises, fashion brands and household name artists and musicians pile into the market.”

Green said the survey revealed that high-net-worth investors want a slice of the action as they appreciate that there’s inherent value in digital representations of physical things people love.

“They also know that NFTs are making business models, especially in the creative, sports and entertainment sectors, more profitable and rewarding.”

Diversification

However, for the majority of investors, it could be about diversification.

“Proper diversification of a portfolio across asset class, sector, region and currency is the best way investors can position themselves to mitigate risks and to seize opportunities when they are presented,” explained Green.

“NFTs have a very low correlation to other assets, such as stocks and bonds, and can, therefore, lower a portfolio’s overall risk and volatility levels.”

In order to give investors access to this emerging digital asset class, earlier this year deVere launched its own NFT platform, dV Gems, with Nigel Green explaining that investors around the world are eager to stake their claim in this new ecosystem.

“There’s enormous opportunity for people to be a part of the creation of the digital financial architecture.”

“We expect this trend will continue to grow with increasing numbers of investors wanting to own digital assets that are immutable and exchangeable, offer a store of value and potentially a decent source of returns,” the deVere CEO concluded.