Just a few hours ago Visa announced that they had purchased CryptoPunk #7610 which I believe represents the first publicly traded company purchase of an NFT. Obviously this is very big news for a number of reasons so let’s jump into some of them in today’s piece.
There’s a lot to unpack here and I’m sure you’ll see plenty of takes on Twitter from smarter people than me about this event, but I wanted to break down what I think this means for the industry. Firstly, Visa has just legitimized the entire NFT space (and especially punks) to the traditional finance world. They are essentially sending a signal that they believe NFTs are part of what they call “historic commerce artifacts” and have put their money where their mouth is by purchasing one. And they didn’t just purchase any NFT - they purchased a “floor punk” (aka the cheapest you can buy) which I think also sends the signal that even these punks hold historical significance and value.
What I find to be even more exciting is that Visa used ETH as money to buy this punk and they still have ETH left over in their address - this technically means that Visa has ETH on their balance sheet. Now, of course, this differs from a publicly traded company purposefully buying ETH to hold as a treasury asset, but I think that’s just the next logical step for Visa (and other companies too, of course). The paradigm shift that we are witnessing right now is basically that the world is moving as much of itself into the digital realm as possible - large companies are simply taking notice of this and acting on it (because who wants to be the next Blockbuster?).
If we dig a bit deeper into Visa’s blog post about this purchase, there is one quote that caught my eye and it was Cuy Sheffield (“crypto guy” at Visa) saying that “this [punk purchase] is just the beginning of our [Visa’s] work in this space.” This obviously means that Visa wants to get more involved with the NFT space and maybe even become an NFT marketplace similar to OpenSea by leveraging their enormous user-base to attract buyers and sellers to the platform. There’s a bunch more alpha to be found in the blog post so do give it a read!
Now, to address the elephant in the room, obviously Visa is one of the centralized institutions that the Ethereum ecosystem is working to disrupt so why am I framing them buying a punk as a positive? Well, I actually think this is what disruption looks like. Our ecosystem is acting as a forcing function for these companies to innovate and get involved in our world rather than sit on their hands and do nothing. In saying that, over the long-term, I think that companies like Visa will be relegated to just acting as front-ends for Ethereum and that is still totally in-vision for what we’re building - that is the beauty of a permissionless system!
Visa won’t be the last company to put NFTs on their balance sheet and I think that they will actually be the company that convinced all the other ones to get involved. It’s often not talked about but companies feel “fomo” as much as individuals do - they may be slower to act on it given their size, but you can bet that any large company worth its weight is currently scrambling to spin up a “crypto research division” (if they haven’t already done so).
This is what mass adoption looks like folks - embrace it and enjoy the ride!
Have a great day everyone,
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All information presented above is for educational purposes only and should not be taken as investment advice.