Here’s what we can expect when the hype around NFTs and the metaverse dies down.
There are two sources of profit in the world of investing: potential and progress. Profits generated by potential rely on some framework of faith, even if that faith is well informed and somewhat quantified. Early investors make some of their watershed deals at the potential stage, recognizing household name founders or placing an early bet on what they believe to be the next crucial development in an in-demand space.
But progress is where most of the returns in terms of financial gain and societal benefit take place. Ideas, services and startups that move us forward create returns from the progress they initiate, and those returns can be invested to enact the same effect in other problem areas; the wheel of 21st century progress continues that way.
Ideally, those two processes intersect, and investments into a startup’s potential contribute to and result in their making successful progress sooner. But for every one investor who sees potential in an idea, space or industry development, there results an ensuing wave of public interest that’s less specified and less certain regarding the potential, but equally bullish in their appetite for involvement and desire not to miss out. This is what we understand as “hype,” and the results are not always positive.