Raoul Pal, CEO and co-founder of Real Vision, speculates that non-fungible tokens (NFTs) would behave similarly to “high-end property” in the old economy and outperform Ether (ETH) during boom cycles in the cryptocurrency market.

The former JPMorgan executive offered a summary of what he felt most optimistic about NFTs in a video uploaded to YouTube and posted on February 20. The video was an hour long and covered topics such as key use cases for the asset. class, its underlying technology, and its potential performance compared to Ether.

According to Pal, in the same way that “high-end property” often outperforms the market when the “economy picks up,” the same is expected to happen with specific NFTs during boom cycles in the cryptocurrency market.

“Therefore, I can transfer my ETH to a JPEG, which is an NFT. Why, however? If you want, you can think of a [Crypto]Punk like high-end property in London, New York, Hong Kong or wherever, and when the economy starts to grow and people have more money, they tend to buy expensive high-end properties. “Well, because like luxury property and thinking about a [Crypto]Punk like a luxury property in London, New York, Hong Kong or wherever.

On top of this, it has a track record of outperforming most of the market. And I think the same will happen in the ETH economy,” he continued.

He drew attention to the fact that major collections like CryptoPunks and Bored Ape Yacht Club (BAYC) have become status symbols in the cryptocurrency community. This is analogous to the fact that owning a house, car, or luxury item from a well-known brand gives access to exclusive clubs, or what he terms “mini-network states.”

NFTs, he said, provide a “means to own property in the ETH market.” He went on to say that humans are “stupid” and “love to point things out socially.” ETH is a cryptocurrency.

In hindsight, the former hedge fund manager said it was 2022 when non-fungible tokens (NFTs) began to catch his eye because he began to “understand the power of what they are and what they can do.” This included the ability to transfer “value” using blockchains and automated smart contracts.

He also mentioned the applications of NFTs in contract resolution, saying that blockchain-based ledgers can offer verifiable transparency about what has been agreed between people, while smart contracts can, in essence, remove the need for unnecessary third parties. . He cited these apps as an example.

“Now what’s interesting about the smart contract element of a networked financial transaction is the fact that it allows the settlement mechanism to be automated in code and resolved without the need for a third party, so you don’t need the courts, the lawyers, notaries and accountants”,

Pal said that since he started investing in NFTs, he has placed around ten percent of his ETH holdings in “premium NFTs” such as CryptoPunks and BAYC NFTs.

Due to the fact that such collections have been able to hold a respectable level of value during the bad market, he hypothesized that they might provide more upside potential than downside risk. He is also of the opinion that there will be an increase in the price of ETH in the future.

“When measured in terms of ETH, the CryptoPunks and Bored Apes prices have shown a staggering lack of volatility over the past few days. Yes, they had an explosive top, and once it went down, they came back and have been trading around 65 ETH. since then. And the fact that they didn’t fall much further is something that fascinates me. During the big crypto market crash in June, they had a strong rise. Other than that though, they just made a comeback and have held their position in 65 ETH. So whatever ETH does, they are just replicating it,” he said.