“The rather short shrift reaction by Bradford City chairman Stefan Rupp to the speculation soaring over a bid for the club by a group of NFT fans isn’t surprising, given the offer and financial backing of the interested party appears so scant on detail.
When Baupost, the $30 billion Boston-based hedge fund now managed by Seth Klarman, was founded in 1982, it was launched with a core set of aims. Q4 2021 hedge fund letters, conferences and more Established by Harvard professor William Poorvu and a group of four other founding families, including Klarman, the group aimed to compound Read More
Building A Community With NFTs
According to news reports, the group has lofty aims to use NFTs to build a community around the club. It reckons that by selling these digital tokens to fans, revenues from sales of NFTs will enable them to buy players and outspend opponents in pursuit of promotion right up to the Premier League. Given the huge amount of money washing around the ELF leagues, that is a hugely ambitious aim, particularly given how volatile other crypto assets have proved over recent weeks. NFTs, or non-fungible tokens, are certificates of ownership for mainly creative digital assets. They have been described as trading cards for the super-rich and they are a risky game to play. Individual non fungible tokens may have sold for millions of dollars, as a bubble of speculation has blown up in the crypto Wild West, and the art, music and gaming industries have scrambled to start playing the game in the search of fresh revenue streams.
But ethereum, the blockchain network upon which many NFTs are spawned and where they are traded in marketplaces, has seen its value fall by around 20% in less than three weeks. The rollercoaster ride is set to continue given that crypto assets are also highly sensitive to the fortunes of the stock market and were propelled higher in an era of ultra cheap money. As speculation swirls about how rapidly central banks will keep tightening mass bond buying programmes and raising interest rates, given soaring inflation, they are likely to stay volatile.
There is a risk that the initial frenzy of interest in many of today’s NFTs will wane, and the assets could end up being almost worthless, in the same way as once sought after CDs, vinyl or even popular football players have ended up in the bargain bin.
If Bradford City Football Club does end up taking an offer seriously, the club and its fans will need significant reassurance about future streams of revenue from this highly speculative digital playground."
Article by Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown
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