When Srishti Mehta, a 28-year-old commercial artist from Bengaluru, sold two of her digital works with NFT, she stumbled upon a whole new world. Not only did she find out that she could monetize her unsold artwork, but she was also among the first Indian artists to sell their work with NFTs. Since then, five other of his creations are now “tokenized”. That is, a digital certificate now exists for every painting that can be bought and sold digitally.

An NFT is a digital asset that represents real world objects such as art, music, videos, etc., which can be bought or sold using cryptocurrency. They are rare and each digital asset has its unique identification code.

When digital artist Michael Joseph Winkelmann, also known as Beeple, sold his work “Everydays: the First 5,000 Days” for $ 70 million using an NFT, millennials began to capture the buzz around NFT.

Taking one example, WazirX, India’s largest crypto marketplace, announced the country’s first NFT marketplace on May 31, with 300 creators who will post their work on the platform.

“The digital scarcity and exclusivity that NFTs create, especially for art and music, is different from what we see in other physical assets,” Mehta explains. “While anyone can view or download a copy, only the purchaser of the NFT owns the original digital asset. It’s more exciting and rewarding than investing in a stock / MF.

Exclusivity and the thrill of owning something that others don’t have are the main reasons millennials are turning to digital assets. Luxury goods and collectibles are also seeing increased interest for the same reason. Websites and apps like StockX allow users to buy and sell limited edition sneakers, collectibles, and watches.

For Mehrnosh Nagporewala, a 25-year-old Mumbai-based pastry chef and sneaker enthusiast, investing in limited edition sneakers is as easy as investing in MFs. Religiously studying new trends and sneaker releases internationally, bidding online for a pair and then retaining your treasured collection is something he equates to investing in art and collectibles.

While turning passion into profit may be the driving force for a few millennials to turn to new forms of investing, technological prowess and the thirst for new knowledge has led millennials to this year’s buzzword: assets. cryptographic and cryptographic.

Some millennials see crypto as a way to break away from traditional investment structures and products and build wealth by forging their own path.

“The Pioneer Advantage is what drove millennials to turn to crypto / crypto assets with such enthusiasm. While they may feel late for partying when it comes to making their mark on the stock market, they feel like they are on a level playing field or even embracing crypto quickly. This is like investing in the stock market in India in the early 90s; make some good moves and you made a fortune, ”says Nishchal Shetty, Founder and CEO of WazirX.

The pioneer advantage, coupled with the thrill-seeking prospects of the younger generation, tipped the scales again for crypto as an investment avenue. With an ability to take more risk and the urgency to earn higher returns, the volatility of crypto is more acceptable to them.

For millennials, from education to communication, most of their lives have shifted online. The only thing that isn’t completely digital for them is their assets, and that is changing fast.

While investing in crypto assets has given Indian millennials the opportunity to participate in the global economy and own assets that are not bound by geographies, India’s lack of legal and fiscal clarity has left them groping. .

In a positive step to reduce uncertainty around crypto, the RBI recently clarified that banks cannot warn customers against trading virtual currencies using a circular that was rescinded by the Supreme Court. While some see this as a relaxation of the government’s stance on crypto, experts say there is still a long way to go. Following its policy decision on Friday, the RBI clarified that its stance on cryptocurrencies has not changed and it has raised concerns with the government.

While the RBI has expressed repeated concerns about crypto as a medium of exchange, for now the clarification seems pretty clear and effectively gives banks the green light to continue processing crypto exchanges after they have made the move. required KYC and anti-money laundering compliance in accordance with Fema regulations, ”said Akshay Sachthey, senior partner at Phoenix Legal.

In addition to legal challenges, the taxation of gains on crypto investments also comes with uncertainties. In fact, the lack of clarity has also prevented some wary millennials from investing in crypto assets.

While legal and tax hurdles may disappear over time, millennials have a lot more to be wary of when investing in alternative investments.

“Millennials or others, investors should remember that NFTs, crypto and collectibles should be viewed as alternative investments and not mixed with traditional investments. In fact, it is only after investing in traditional avenues like equity, debt, gold, etc. that you should consider these alternative investments, ”says Suresh Sadagopan, founder of Ladder7 Financial Advisors.

The huge volatility of crypto assets over the past few months has highlighted the risk associated with alternative investments.

“You just can’t put all of your money into assets that seem to be working well right now because there isn’t a proven track record for these new products. In addition to doing adequate research on alternative investments, you should also stick to the basics of financial planning – investing with your goals, risk appetite and time horizon in mind, ”says Sadagopan.

He recommends that millennials who are fond of alternatives only allocate a maximum of 5-10% of their portfolio to alternative investments like crypto and only invest their disposable income that they are willing to lose on such investments. .

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