Otis Review 2021: Best Collectible Investing Platform?

Growing up there’s a good chance you collected something. Whether it was baseball cards, Pokémon cards, beanie babies, or even rocks, some of those collectibles have gone on to become worth a significant amount (probably not the rocks though).

Personally, I was a Yu-Gi-Oh card collector from ages 6-13 and ended up building a substantial collection over those 7 years. Unfortunately, my mom decided to sell all of my cards at a garage sale when I went to camp one summer and my only real asset as a child was lost.

Flash forward to today, and it’s possible that some of those cards may have been worth hundreds or even thousands of dollars. Although I missed out on the appreciation over the last decade, many Yu-Gi-Oh cards, Pokémon cards, and other nostalgic collectibles continue to appreciate significantly every year.

While the high price tag on some of these assets is prohibitive for many retail investors (some of these cards sell for $1,000,000+) there are a number of ways that investors can get exposure to these assets. One of the most popular of which is through a platform called Otis.

Otis is the self-proclaimed stock market for culture and in this Otis review we’ll provide an in-depth look at exactly what the platform has to offer.

Otis Review: Platform Highlights

• Investors on Otis can purchase fractional shares in culturally significant assets for as little as $10
• Otis offers a secondary market making your investments highly liquid
• Non-accredited investors can access all investment opportunities on Otis
• Otis is constantly adding new assets and expanding into new asset classes like NFTs
• Investors can track all of their assets in real-time through the Otis app
• All investments on Otis are securely stored and insured by Aspen American Insurance Company

Click here to view current offerings on Otis!

What is Otis?

Otis is a platform for investing in fractional shares of art and other collectibles. The platform’s goal is to make investing in collectibles as simple and streamlined as investing in the stock market.

Founded in 2018 by one of the creators of Skillshare, Otis has quickly become a top platform for investing in cultural assets. From Banksy paintings, to comic books, and even CryptoPunks, the platform provides a wide variety of investment opportunities.

Each of these assets are purchased by Otis, placed into an LLC, and offered to investors on the platform. Each share starts off at $10 and after all of the shares have been sold, investors the ability to trade them with others.

How Does Otis Work?

Currently, investors are only able to invest through the Otis mobile app. From the app, you are able to view your current holdings and buy and sell additional assets. The Otis website will give you basic information about the offerings available on the platforms but will not allow to to make any transactions.

After downloading the app, you will be prompted to select the asset classes that interest you. These include art, trading cards, collectibles, an more.

You’ll also need to select whether you are an accredited investor. In order to qualify as an accredited investor, you’ll typically need to have an income of $200,000 per year ($300,000 if married) or a net worth of $1,000,000 excluding your home.

At the moment, all of the deals on Otis are open to non-accredited investors. However, it is possible that in the future they may add deals exclusively for accredited investors.

Once you create your account, you are able to link a bank account, deposit funds, and start trading. Keep in mind that all of the assets listed on the Otis platform are safely stored and insured. Otis insurance is issued through Aspen American Insurance Company and covers assets both in transit and in storage.

Otis Returns

Through the Otis investing platform, there are two potential ways for investors to realize a return on their investment.

First, investors can choose to sell their shares on the secondary market at any point. With most of the popular listings on the platform, there is an active secondary market making it easy to sell your shares. For example, there are over 800 buy orders currently open on the sealed copy of Mike Tyson’s Punch Out!!.

Investors in this asset can choose to sell at any point to one of these willing buyers and realize a gain on their investment. For instance, if an investor purchased a share for $10 when this asset was released, they could sell that share today for $60 and realize a 500% gain.

The other way Otis investors can realize a gain is if Otis decides to sell the asset. At any point, Otis may receive a buyout offer on an asset. If that happens, they will present this buyout offer to the shareholders for a vote. If the shareholders approve the vote, then the entire asset is sold and the shareholders receive their portion of the sale amount.

Recently, a graded copy of Halo: Combat Evolved was approved for a buyout at a price of over $95 per share. This represented over an 850% gain for shareholders of the asset.

While these examples illustrate the potential for significant returns, this should not be the expectation for all assets on Otis. Similar to stocks, some appreciate and some will fall in value depending largely on investor sentiment.

Click here to view current offerings on Otis!

Otis Fees

Unlike many other collectible investing platforms, Otis is very upfront about the fees that you pay as an investor. Otis investors will not have to worry about any hidden fees or extra costs when investing on the platform.

There is a 0-10% sourcing fee that will apply to all deals listed on the platform. This allows their team to fully analyze the investment and covers the cost of maintaining the platform.

Additionally, the broker-dealer that Otis uses to facilitate its transactions imposes a 1% fee on invested capital. All in, the average deal on Otis will be subject to a total fee of approximately 5%.

With Otis, there are no additional trading fees or annual management fees.

Otis Pros

• Access to a wide variety of investments
• Low minimum investment for all investments
• Open to non-accredited investors
• Otis insures all assets and and stores them securely

Otis Cons

• Some asset classes have minimal options
• Low market cap assets can experience significant price swings
• Average fee of 5%

Otis Review: Final Thoughts

For investors searching for exposure to a variety of collectibles and culturally-relevant assets, Otis may be the perfect platform. With a wide variety of types of assets and a low price point for investment, it is certainly one of the easiest ways to start investing in art.

However, some investors may be weary of an average fee of 5% when compared with more traditional investments. While this fee may seem high from an outside perspective, the cost to store and insure many of these assets is far greater than the cost of managing an ETF.

Either way, it is free to create an account for Otis and start browsing their offerings!

Click here to view current offerings on Otis!