Sam Bankman-Fried is the founder and CEO at crypto exchange FTX. FTX Official/YouTube
Sam Bankman-Fried, CNBC's NFT expert, stated that NFTs are growing in popularity faster than buyers can recognize their potential.
The founder of crypto exchange FTX stated that most people who get in don't know what it will look like.
He stated that NFTs can be a source of excitement and could result in huge adoption or make investors unhappy if they crash.
Subscribe to our daily newsletter 10 Things Before The Opening Bell.
Sam Bankman-Fried, a crypto billionaire, said that non-fungible tokens have become mainstream faster than any other asset he has seen. However, most people who own these assets don't know the future.
In an interview with CNBC, the 29-year-old said that he still believes that most people entering don't know what it will look like.
Bankman-Fried is the founder of Alameda Research crypto trading company and crypto derivatives exchange FTX. He said he has heard from clients who want to be involved in NFTs. When asked by clients what they would like to do with the tokens they reply, "We don’t know."
NFTs, which are digital assets that can be used to represent any type of art or music, are stored on blockchain technology. The purchase of an NFT is recorded on a digital ledger that will remain untouched.
These tokens have revolutionized the way artists and content creators showcase and sell their work. Visa, the payments card giant, announced Monday that it had purchased a CryptoPunk for $150,000 or 49.5 Ethereum.
Bankman-Fried stated that it was almost mainstreaming faster than mainstream understanding of what they are adopting. It could result in massive adoption and a rapid pace of adoption. It could leave people with a bitter taste in their mouths if there is a crash. No one has ever figured it out.
According to a Galaxy Digital report, which cites data from DappRadar, trading volumes for top NFT collections like CryptoPunks, Bored Ape Yacht Club and Meebits has increased by more than 300% over the past month. This is due to the popularity of play-to earn games and the rise in NFTs as a store-of-value.
Bankman-Fried stated that "I'm certainly not going to claim people haven't made any money buying them" and added, They have been sold by many people. If you understand why they are desirable, that would be one way to get in the game.
He said that NFTs were an undeveloped, "nascent" space and that there is a lot of uncertainty as to the future direction.
Read more: The CIO for a $1B crypto index fund has returned 354% over last year shares 2 reasons he's "extraordinarily bullish" on ethereum. He also explains his outlook for rival tokens Cardano, Solana