Do tokens have wings, or even legs? it depends..

If you are a Web3 investor, chances are you are being asked to navigate the complex world of tokens – both fungible and non-fungible - NFTs. Like all financial assets, if you are willing to concede that tokens are financial assets (!!), like I have, then they are subject to market vagaries. Public market stocks go up and down for a number of reasons – some would argue they are based on financials of the underlying companies – Discounted Cash Flow – DCF if you will. However, a large part of the market is based on speculation, momentum, investor greed and FOMO. Long term, or value investors generally hold stocks for years and there is belief that long term stock prices resemble true DCF values. However, near term fluctuations are wild, and speculators gain and lose very quickly.

Private market valuations have tended historically to be more value based, based on a long term investment horizon anyway, but momentum has been playing a greater and greater role in recent past, driven by capital availability and the dynamics of certain sectors.

Tokens take this to the next level. You have tokens, which are absolutely based on thin air, to art based NFTs, where you could make an argument of collectibles, to actually income generating tokens. If you have been following my posts, you know I love 2x2s, so here’s one to try and map out some of the features (or bugs) of these.

Wherever and if you decide to invest, these all are in the high risk category. So tread carefully. Like all 2x2s this is a gross over simplification, and does not cover the entire landscape of tokens. If I wrote disclaimers, I would have to write a whole page full of them.

I would welcome views and comments.