Soaring Prices for Enjin, FLOW and Rarible Reveal Risks of ‘NFT Marketplace’ Tokens – CoinDesk – CoinDesk

Soaring Prices for Enjin, FLOW and Rarible Reveal Risks of ‘NFT Marketplace’ Tokens – CoinDesk – CoinDesk

A $6.6 million digital token representing an animated clip of a graffiti-covered Donald Trump lying face down in the grass. A $1 million batch of 34 “digital collectibles” known as CryptoPunks. A $69,000 dogecoin-inspired digital token representing a pixelated cat image.

The price tags for these “non-fungible tokens,” or NFTs, might seem daunting, inaccessible or downright ridiculous to the average person. 

That’s why some cryptocurrency traders, rather than buying NFTs directly, are buying digital tokens affiliated with the marketplaces that have popped up for trading NFTs. This way traders can bet on the NFT industry’s growth without having to go all-in on some sky-high priced digital artwork or trading card.  

Investors think these tokens “can serve, in a way, as index bets on the growth of the NFT marketplaces they power,” said Alex Gedevani, research analyst at Delphi Digital.

NFT frenzy

According to Messari, a data provider for cryptocurrency markets, the 10 biggest digital tokens that are associated with NFT platforms have returned in a year-to-date price range from about 60% to 900%.

The FLOW token, of the Dapper Labs-backed Flow blockchain, which powers the digital collectibles platform NBA Top Shot, is up 79% just in the past seven days to a market capitalization of $1.1 billion, according to CoinGecko. (Last week, some 10,631 packs
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