The market for digital collectibles or NFTs (non-fungible tokens) has exploded in the last months. Due to this boom which is not stopping and has led to millions of dollars spent on art from digital artist Beeple, the first tweet of Twitter founder CEO Jack Dorsey to sports highlight clips from the NBA. But with all the hype there also come significant risks, which should be well understood by the people.

Beeple, Everydays — The First 5000 Days NFT, 21,069 pixels x 21,069 pixels (316,939,910 bytes). Image courtesy the artist and Christie’s.

Liquidity Risk