8th Mar 2022
Since the GameStop incident in early 2021, Reddit has been recognized as a source of potential investment wisdom. With so much debate about buying or investing in NFTs, many people are turning to investment subreddits for insight and guidance.
Which NFT Reddit stocks are trending highest on investing subreddits, and what do Reddit users think about the new trend?
What are Reddit stocks?
Reddit is a well-established social media platform, and arguably the most loved by its users. Reddit forums, or subreddits, cover hundreds of thousands of topics (there are currently over 130,000 active subreddits, and many more that have lapsed1).
For years, Reddit was seen (and often dismissed) as a platform for advice, humor, and fan communities. The idea that Reddit could seriously impact the economy would have been laughed out of the room — until early 2021, when a group on the r/WallStreetBets subreddit noticed that hedge fund traders were short-selling GameStop stock, and would lose money if share prices were to rise significantly2.
Video game fans and hedge fund haters conspired through the subreddit to buy up GameStop shares to drive up the price and disrupt hedge fund short selling strategies. Although in the big picture hedge funds were merely inconvenienced, it was a triumphant moment for Reddit users, who demonstrated the power that small investors can have when they work together.
If Reddit investment trends are the tail that can wag the dog of the stock market, it may be foolish to dismiss NFT Reddit stock recommendations. So let’s take a look at what Reddit cant tell us about NFTs.
What are NFTs?
To define NFT, or non-fungible token, in the simplest terms, it’s a digital token that lives on the blockchain and holds data that can’t be erased or tampered with. But to answer the question “What is an NFT?” or “What is NFT crypto?”, you have to understand that NFTs can prove ownership over digital assets, thereby creating value for digital items like memes and digital art which were previously untradeable.
NFTs are one of the hottest trends in investing right now, with celebrities coming from every corner to jump on the NFT bandwagon. But NFTs have the potential to be more than just another asset class.
Why are people interested in NFTs?
Some people want to invest in NFT-related company stocks because new is exciting, and NFTs are the newest of new asset trends. Others want to be able to own their favorite meme, but still others are drawn to NFTs because they sense the beginnings of more than just a new market.
They recognize a new community.
Celebrity NFTs are built upon that concept. People don’t only buy a Shawn Mendes NFT so they can listen to his music (they can do that on Spotify). They buy it to connect with him, be part of his fan community, and access unique experiences.
The musician RAC, who created the $RAC token in October 2021, explained “I believe that it [crypto] can create a new paradigm for creative ownership directly between artists and their communities. This new paradigm is what I want to pursue with $RAC and I want to put it in the hands of my existing fans and community.3”
The celebrities with the most successful NFTs are those who use them as a vehicle for connection. 5 of rapper Lil Pump’s recent NFTs included ownership of a digital version of one of his favorite chains, offering an intimate experience and connection for the fan. “Now you can live like me and own a rare NFT collectible of one of my favorite chains,” said Lil Pump.4
The Bored Ape Yacht Club (BAYC), one of the best-known NFT communities, took off when celebrities like Jimmy Fallon began talking about their membership. Now, not only has the value of Bored Apes soared, the club has spilled over into real-life meetups. Likewise, the Bronx Zoo sells a ZOO Token that gives buyers a voice in the governance of the virtual zoo, making them part of a shared community space.
Reddit and NFTs are soul sisters
In this sense of building a shared community, Reddit has a lot in common with NFTs. NFTs are used to establish more equal, decentralized communities, where every NFT holder has a voice and no single entity can act as gatekeepers or set rules about what is acceptable.
Reddit too is a virtual community where people earn value by answering questions, and at the moment, it is the most decentralized social media platform. Its democratically-agreed code of conduct lies close to the NFT ideal of shared governance.
With interactivity and community playing such an important role in NFT purchases, it makes perfect sense for people wondering how to invest in NFT exposed companies to turn to Reddit for help.
Which NFT ecosystem exposed companies are being talked about on Reddit?
Roblox is rapidly expanding from a video-game-building platform into its own metaverse, complete with in-platform digital currency, digital events, realistic avatars, and plans for NFT-like limited edition items5. Reddit already hosts several subreddits dedicated to Roblox, so it’s not surprising that the Reddit community is in favor of Roblox as an NFT investment.
Coinbase is one of the most trusted secure marketplaces to buy and sell cryptocurrencies and NFTs, and is among the fundamental tech companies supporting the broader blockchain-based universe. It’s on the radar of multiple hedge funds as a growth stock6. As crypto, NFTs, and the metaverse mature, Coinbase is well positioned to benefit.
GameStop recently announced plans to build an NFT marketplace7, and Reddit was delighted. GameStop never lost its Reddit popularity even after the battle with the hedge funds died down, and now Redditers are thrilled to have been proven right in supporting the company. The company has hired around 2 dozen new employees to handle the new foray into NFTs, and share prices surged following the announcement8.
DraftKings was already popular as one of a handful of mega-platforms for online sports betting9, but now it’s gaining even more traction as an NFT-related Reddit stock. In 2021, DraftKings launched an NFT marketplace for all kinds of NFTs, but with a special focus on sport-relatedtokens. DraftKings announced partnerships with Autograph, the sports-centric NFT platform set up by former NFL quarterback Tom Brady, and the NFL, for its 2021-2022 season drops10.
Based in Washington, Funko primarily markets and licenses toys, as well as clothing and lifestyle products, but now it’s moving into NFTs and attracting a lot of attention. The company owns a number of licenses which it intends to leverage into NFTs, and has a strong customer base that has shown enthusiasm about the prospect of linked NFTs11.
NFTs and Reddit
It would be interesting to see what would happen if Reddit tokenized its own platform to become an NFT community. For example, users could earn NFTs for valuable answers, so your willingness to share experiences and insights could translate into real economic value, and/or more influence over the community.
For the moment, however, the meeting ground between NFTs companies and Reddit is an NFT subreddit, where NFT aficionados can share their affection for NFTs, NFT newbies can find guidance about how to invest in NFT companies, and everyone can swap tips for which NFT-related company stocks and NFT-related ETFs to buy.
For those looking for a way into, Defiance’s NFTZ ETF is one way to spread your investment with a single purchase. NFTZ tracks the BITA NFT and Blockchain Select Index, which itself covers a number of promising NFT-related stocks that are involved with NFTs, blockchain, cryptocurrencies, the metaverse, and NFT marketplaces.
1 “Reddit Revenue and Usage Statistics (2022)” January 11, 2022 https://www.businessofapps.com/data/reddit-statistics/
2 “GameStop, Reddit and Robinhood: A full recap of the historic retail trading mania on Wall Street” January 30, 2021 https://www.cnbc.com/2021/01/30/gamestop-reddit-and-robinhood-a-full-recap-of-the-historic-retail-trading-mania-on-wall-street.html
4 “Lil Pump Launches The “Lil Pump NFT Collection” For High-End Collectors And Fans In Partnership With Sweet” March 10, 2021 https://www.prnewswire.com/news-releases/lil-pump-launches-the-lil-pump-nft-collection-for-high-end-collectors-and-fans-in-partnership-with-sweet-301244991.html
5 “Roblox pushes toward avatar realism, plans to add NFT-like limited-edition items” October 14, 2021 https://techcrunch.com/2021/10/14/roblox-avatar-updates-rdc-2021/
6 “Reddit Stock Portfolio: 5 Most Popular Tech Stocks To Consider” January 17, 2021 https://www.insidermonkey.com/blog/reddit-stock-portfolio-5-most-popular-tech-stocks-to-consider-1020703/2/
7 “GameStop Entering NFT and Cryptocurrency Markets as Part of Turnaround Plan” January 6, 2022 https://www.wsj.com/articles/gamestop-entering-nft-and-cryptocurrency-markets-as-part-of-turnaround-plan-11641504417
8 “GameStop’s stock soars over 30% after hours, and Reddit crowd cheers, after report of plans for NFT platform” January 6, 2022 https://www.marketwatch.com/story/gamestops-stock-soar-over-30-after-hours-thursday-and-reddit-crowd-cheers-after-report-of-plans-for-nft-platform-11641509212
9 “Reddit Stock Portfolio: 10 Most Popular Tech Stocks To Consider” January 17, 2022 https://finance.yahoo.com/news/reddit-stock-portfolio-10-most-161824153.html
10 “The NFLPA and DraftKings Unveil Plans for Gamified NFT Collaboration” December 7, 2021 https://www.draftkings.com/about/news/2021/12/the-nflpa-and-draftkings-unveil-plans-for-gamified-nft-collaboration/
11 “3 NFT Stocks Getting the Most Attention on Reddit” September 21, 2021 https://www.nasdaq.com/articles/3-nft-stocks-getting-the-most-attention-on-reddit-2021-09-21