Digital Asset Investment Strategy in China
The First Step in Digital Collectible Investment: Choosing the Right Platform
The development of the platform is key to determining whether a digital collectible holds value. First, you can analyze the company behind the platform and its equity structure. Taking leading digital collectible platforms such as JingTao and ZhongChuan XinWenChuang as examples, it is easy to see that JingTao is backed by Alibaba, while ZhongChuan XinWenChuang is supported by the State Council. Digital collectibles are essentially a string of code on the blockchain, not the images or models presented on the front-end. If the platform chosen by investors were to shut down its operations or servers due to uncontrollable factors, even though the collectible’s data can still be traced on the blockchain, it will no longer be possible to spread or appreciate it through any medium, making its value zero.
The Second Step in Digital Collectible Investment: Choosing the Right Collectible
The quality of the collectible determines the price and the value floor. Here, price and value are discussed separately because people often confuse the two. During the period when the digital collectible market was growing rapidly, some platforms operated on hype. A five-digit-priced image might be AI-generated with no cultural or artistic background, but through hype and capital, its price was inflated, misleading users into misjudging its value. How to determine the value of a collectible has puzzled many users, and there are various ways to assess its value. Here, I will introduce a simple approach, which will be expanded upon later. For example, a painting in the real world might auction for 10 million yuan. If this painting is recreated 1:1 as a digital collectible, with only 1000 limited editions, and assuming the digital collectible is only authorized once with no further operation, it would be considered rare within the digital collectible space. Investors can anchor the collectible to its real-world counterpart, and based on their value assessment system, estimate the value of one digital collectible. If, in the value assessment system, the 1000 digital collectibles are equivalent to the ownership of the real-world painting, then the value of each digital collectible would be 10,000 yuan.
The Third Step in Digital Collectible Investment: Choosing the Right Project Team
The credit and empowerment of the project team determine the upper limit of the collectible’s value. Suppose the collectible has further operations and has not achieved decentralization. The project team can enhance the value of the collectible by continuously empowering it. Continuing with the example of the painting, if the project team adds value by offering a concert ticket for each digital collectible, and the ticket is priced at 10,000 yuan, the value of the collectible would increase to 20,000 yuan. However, empowerment is uncertain and involves trust issues. If the project team fails to deliver on their promises, the value of the collectible remains at 10,000 yuan. Therefore, choosing the right project team requires the investor’s judgment and insight. It is recommended to prioritize leading project teams and, secondly, to identify other promising teams based on your understanding and analysis.