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Crypto Trading Platform eToro Launches $20M NFT Fund as Industry Approaches Inflection Point


Physical artwork for a Bored Ape NFT on display at a cryptocurrency exchange in Hong Kong.

Paul Yeung | Bloomberg | Getty Images

Trading platform eToro has unveiled a $20 million fund to buy NFTs and support creators. The firm announced the launch at The Bass, a contemporary art museum in Miami, on Thursday.

The trading platform fund is part of a new initiative called eToro.art, which aims to support NFT creators and brands.

Guy Hirsch, US managing director of eToro, said the new fund marks the start of a larger NFT strategy for the company, which will eventually offer a host of services to enable investors to participate in the emerging economy.

NFTs, or non-fungible tokens, are digital assets that represent real-world objects – such as art, music, real estate and beyond – and cannot be replicated.

“Before, with bitcoin and ether, only Goldman Sachs or similar traditional financial players participated in or sought to expand into crypto,” Hirsch told CNBC. “NFTs essentially make any potential brand a player in that market.”

As part of its new initiative, eToro showcased its digital art collection, which includes well-known projects including the Bored Ape Yacht Club, CryptoPunks, and World of Women. Additionally, eToro plans to commit $10 million to help emerging creators and brands bring their new NFT projects to market this year.

Digital art is just one use case for NFTs. Hirsch said eToro plans to add features that will give customers exposure to use cases beyond digital art.

In the past few months alone, major brands across all industries, including Coca-Cola, McDonald’s, Nike, Gucci, the National Football League and many more, have incorporated NFTs into their marketing initiatives.

“Any brand can get into it and create some sort of NFT that represents an ownership stake in some part of the brand,” Hirsch added.

Valuing digital art

Investors struggle to see the value of digital art and are perplexed by big sales, like Beeple’s work, which sold at Christie’s for $69 million.

Price discovery in digital art and knowing what to buy are still big question marks, but the industry is working on it, Hirsch said. Investors today generally use the floor price, or the minimum amount of money you can spend to purchase an item from a collection.

“It has to be more sophisticated than that,” Hirsch said. “We are seeing new services emerge that will be akin to the traditional art appraisal process. In a year or two we will have third-party services that will appraise individual pieces and give you an approximate price on what you are on. point to buy or what you own in a way that would be agreed upon by market participants.”

Art has been a strong asset class for decades, but only for the super rich, Hirsch noted. EToro seeks to bring together new artists and new investors to help them build their wealth in this new way.

NFTs from some of the blue-chip projects in eToro’s collection already fetch at least hundreds of thousands of dollars on OpenSea, the largest NFT marketplace. It’s hard to reach for small investors, but the company expects many of the lesser-known digital artists whose work will help bring to market won’t be priced like a Bored Ape – a popular collection that attracts buyers. famous.

“When these artists create a collection or an NFT drop, the price of those would be pretty low,” Hirsch said. “People could participate, and if the community is strong and the art is promising, it will go up in value, but the entry point would still be accessible to the everyday investor.”

“Some of them will hopefully achieve Bored Ape status,” he added. “Eventually, like the Bored Apes, it will create a lot of new millionaires, a lot of new wealth for people who didn’t have it before.”

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