Magnify #5 — Visa Got Punk’d

Visa Got Punk’d - Magnify Newsletter #5

Visa bought a CryptoPunk. Budweiser bought an NFT.

Surely this must be an instrumental moment in the world of crypto.

Or is it?

Several people are “reading between the lines” and rejoicing thinking that the centralized institutions are finally recognizing crypto. It might be true. But I beg to differ, and here’s why.

In their article (that explains why they invested in a Punk), I read that they were keen on exploring this new space. That’s cool. But an organization (valued at a north of $500B) investing and buying the cheapest punk available…it just does not add up. But that’s okay, I’m sure someone who has been in the space for long has been truly seeing the potential here.

The VP and Head of Crypto Division at Visa, Cuy Sheffield highlighted that their decision was driven by curiosity and their need to support emerging creators in the space. And out of sheer curiosity (no pun intended), I took the liberty of just looking at his profile but, for the life of me, couldn’t find any details of his past adventures in crypto. Perhaps he works in silence?

But then I recalled that last year, they partnered with Coinbase and helped them issue native crypto visa cards. Surely the team there would feel indebted and be supportive to the exciting new ventures for Visa, no?

Umm, yes, but then I fail to understand why would a company that has no direct relation to users buy an NFT? Partnering with Coinbase made sense because crypto Visa cards can be useful. While NFTs are used as transactional tokens in metaverse applications (LAND token for Decentraland), I can’t think of any purpose they would solve for a company focused on transactions. Moreover, Visa’s primary business model is B2B, which really makes me think — why would they buy a Punk, give the impression that they are awestruck by the entire space, and end the narrative saying they are doing this to support emerging artists?

Oh, I think the answer lies here. They could potentially adopt a B2C model where they partner with artists and issue NFTs that can be collected by fans. They could help create a smoother NFT experience for individual artists and start partnering with the most popular ones.

But wait. That is still a hypothesis. Here’s what I really think…that Visa is trying to enter a tight-knit community — one that is known for its Punks, its Penguins, its Apes, its Kitties, and so much more. A community that identifies itself by flexing their PFPs (profile pictures). A community that passionately believes in the power of digital collectibles.

(By the way, I wrote an expansive thread on why such a community around NFT exists — you can check it out here.)

And this is true for Budweiser as well, investing 38ETH in a rocket-ship NFT (which is unsurprisingly now their profile pic) along with acquiring the beer.eth domain.

Or Marvel, who also announced releasing their comic book as NFTs.

Or Coca-Cola, who raised over $500K in an online auction of their NFT collectibles.

While huge, centralised institutions such as these getting in on the “fun” is definitely good news, I find it too hard to predict their general attitudes towards the space at this point. I am realistic, optimistic, and skeptical in equal measures.

And you?