NFT stands for non-fungible token, and for the most part, these tokens take the form of trading cards or digital art, such as the Beeple artwork Everydays: The First 5,000 Days, which was sold by auction house Sotheby’s for $69m.
NFTs are also unique items that can't be replaced by something else. By comparison, a share of stock is fungible because a company issues millions of shares all the same. One share of Apple common stock is like another. But if you buy an NFT, it is unique and the specific data relating to the token is stored on the blockchain (normally on the Ethereum blockchain).
NFTs include digital information, including who the creator is and who the owner is. When buying an NFT, it is possible to support the artist directly at every sale, whereas when physical art is sold through galleries, the artists tend to get a cut of the initial sale price and no benefit from subsequent sales.
Major brands, including Marvel, Adidas, and many more have launched their own NFTs. It is a new asset class, with lots of interest and large amounts of money being exchanged. That's why investors care. Digital art can be bought as a passive investment, or it can be traded like a stock.
Here are several companies working in the NFT space to keep any eye on. While these stocks are linked to NFTs, they are still stocks, so learn how to invest in stocks before purchasing.