VanEck Exec: Use Cases of NFTs Approaching Unlimited”

VanEck Exec: Use Cases of NFTs Approaching Unlimited”

Asset manager VanEck is launching an NFT collection aimed at creating a community for crypto investors — with an executive saying the use cases for non-fungible tokens are “approaching limitless.”

“The entire ecosystem — metaverse, gaming, play-to-earn, NFTs, ticket sales — is moving so quickly at the same time with a lot of cross-pollination,” John Patrick Lee, a product manager at VanEck who is in charge of the NFT effort, told Blockworks. “Being in the middle of this is exciting and fun for us.”

VanEck's community NFTs, developed in collaboration with South Korea-based creative NFT agency NUMOMO, are set to launch on Ethereum. The collection includes 750 “common” NFTs, 230 “rare” NFTs and 20 “legendary” tokens.

The NFTs are free and will be distributed over the air to the first 1,000 to sign up. Still image NFT placeholders, scheduled to be updated to their final versions by the end of the month, will be distributed this week.

“We are not launching an NFT to monetize followers or list it on OpenSea,” Lee said. “We are trying to build an active community of crypto-focused investors.”

The NFTs are designed as a kind of digital membership card. Holders can receive early access to VanEck’s research on digital assets as well as exclusive invitations to events.

The project will also trace the journey of a fictional character modeled on Alexander Hamilton as he explores the past, present and future of monetary policy.

As of last November, the 2.7 million NFTs in existence were owned by 360,000 people, according to data from blockchain analytics platform Chainalysis - compared to the roughly 300 million people who use cryptocurrencies.

“I think use cases like this will only further promote the NFT as an asset and be useful to other companies and projects down the road,” said Matthew Bartlett, head of internal sales at VanEck. “It is still a very small segment of the market that owns these assets and there is a lot of room for growth.”

Will other asset managers follow suit?

VanEck's NFT move follows Fidelity Investments' launch of a financial education experience in the Metaverse last month. JPMorgan opened a virtual lounge on Decentraland in February.

But Lee said the firm is the first major asset manager to launch such an NFT collection, and he expects competitors to follow suit.

David Tawil, president of the crypto hedge fund firm ProChain Capital, described VanEck's launch as "a bit gimmicky" to draw people into the NFT universe. However, he added that the effort could help bridge the gap between the collectible aspect of NFTs and the segment's broader use cases.

“The only thing that is clear is that they know this is how their business works,” Tawil told Blockworks. "Whether it's Fidelity, VanEck or BlackRock... every asset manager needs to focus here. Nobody knows exactly what will be the one that spreads like wildfire."

Tawil noted that Fidelity's announcement last week that it would allow customers to invest in Bitcoin through 401(k) plans shows that crypto goes beyond speculative investments.

“We are in a paradigm shift... and how this will all turn out, no one knows, but you have to be on the train,” Tawil said. “You can’t expect to catch up in two, three or five years when everything is fully developed.”

An NFT ETF?

VanEck has 64 ETFs trading in the U.S. with total assets of about $62 billion, according to ETF.com.

The company's Digital Transformation ETF, which holds various crypto stocks such as Coinbase, was launched in April 2021. The company launched its Bitcoin Strategy ETF (XBTF) in November, which offers indirect exposure through investments in cash-settled Bitcoin futures contracts and more recently launched a Digital Assets Mining ETF (DAM).

The company's attempts to launch a spot Bitcoin ETF have so far been stymied by the SEC.

When asked if the company might launch an NFT ETF, Lee said there aren't enough publicly traded companies focused on the segment yet.

“Our thought process as we approach NFTs or any of these new, exciting areas is that we're going to be thoughtful about it,” he said. “We’re not going to bring something to market if maybe the market can’t support it.”

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The post VanEck Exec: Use Cases of NFTs 'Approaching Unlimited' is not financial advice.