Looking for NFT tips? And how to invest in NFTs? We don’t blame you.
The Bitcoin market has been more volatile than ever in recent years. Cryptocurrencies are risky investments for most people because of their volatility.
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Non-fungible tokens (NFTs) are a method to participate in the cryptocurrency boom while avoiding some risks. NFTs are tokenized assets with a fixed value rather than fluctuating with other currencies like Bitcoin or Ethereum. To put it another way, they’re not fungible; they’re one-of-a-kind.
The rest of this article will help you figure out what makes these digital assets unique and how you can get started investing in NFTs right now.
Check our our top NFT tips for beginners looking to invest in NFTs!
What Exactly Are NFTS, and How Do They Work?
A non-fungible token is a unique digital asset stored on the blockchain. NFTs are decentralized and open-source, so anyone can utilize them.
For a more detailed explanation see our what is an NFT guide.
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In short, NFT protocols allow users to transfer products directly without a middleman.
The Advantages of Buying NFTS
NFTs are incredibly versatile, which is one of their most alluring features. You can trade them on cryptocurrency exchanges in addition to being used for digital collectibles, decentralized applications, and online games such as these NFT games.
These tokens have their value, determined by scarcity and demand from gamers, artists, and anyone who wishes to buy the assets via blockchain technology. Given this, it’s easy to see why NFTs are such a popular and profitable investment option.
There is also a concept known as tokenized NFTs, which symbolizes a non-fungible digital asset on the blockchain. Here are some of the additional reasons why NFTs are so popular:
- NFTs are a freely available technology. This protocol allows anybody to create their digital asset, which implies you could tokenize anything.
- They’re a simple method to show that you own a specific item or collection. These digital assets comprise virtual game assets, artwork, firm stock, and other tokenized assets.
- They’re adaptable and scalable, which means they won’t become obsolete as quickly as older technologies.
- NFTs have several uses in real-world circumstances. You might, for example, use them to transfer ownership of a natural thing from one person to another, acquire digital artwork with cryptocurrency, or create a one-of-a-kind coin for your company’s next crowdfunding campaign.
How to Invest in NFTS?
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Buying NFTs with fiat cash at an exchange like Binance or IDEX or an alternative is one of the simplest ways to invest.
Users may exchange Ethereum and other ERC-20 tokens for popular NFTs like Cryptokitties, Decentraland MANA, and Theremin on this site. See more top NFT projects here.
Selling or exchanging your digital assets for other NFTs or cryptocurrencies is another option to invest in NFTs. These tokens may frequently be sold free on EtherDelta or traded for other blockchain-based currencies like Bitcoin.
What Are the Best Ways to Purchase, Sell, Trade, or Accumulate These Tokens?
The blockchain makes it simple to purchase, sell, trade, and accumulate digital assets. The following is how it works:
- Sign up for cryptocurrency exchanges like IDEX, which lets you swap Ethereum or Bitcoin for other NFTs or tokens.
- At IDEX, you can buy popular NFTs like Cryptokitties with fiat.
- Once you have your NFTs, trade them on decentralized exchanges like ForkDelta or EtherDelta with other users. You can also use these platforms to sell or exchange NFTs for other digital assets like Ethereum and Bitcoin.
- If you’re interested in collecting these digital assets, check out OpenSea and Rarebits, which have thousands of NFTs for sale. You may purchase and sell tokens using fiat cash and cryptocurrencies like Ethereum and Bitcoin on these exchanges.
Where Can You Get Good NFT Deals?
If you’re trying to purchase or sell NFTs, bear in mind that supply and demand typically drive the market. The greater a tokenized asset’s price rises, the more popular it gets. As a result, it’s preferable to buy popular NFTs when they first come out so you can sell them fast and profitably.
The next best option for most investors is to look for inexpensive coins and acquire them before they become widespread. This technique may be investing in a new blockchain-based platform before it gains traction or purchasing NFTs that have yet to be released. NFT Discord channels give up-to-the-minute information on forthcoming NFTs.
See the top NFT marketplaces here.
15 NFT Tips & How to Invest in NFTs
1. The Team’s Expertise and Repuation
We’ve seen fantastic phenomena emerge in the industry over the last two years: anonymous creators. While this used to be a huge red flag, it now takes a little more investigation.
It would be best if you didn’t discount the team’s NFT collection because they are nameless. Remember, an entirely anonymous group founded the Bored Ape Yacht Club, and no one knew who they were for a long time before their identities were revealed, allegedly against their choice.
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BAYC NFTs were at peak pricing (floor price exceeding $300K per ape) by the time this happened, and no one in the crew had any qualms.
In other words, instead of focusing on the team’s identity, focus on their accomplishments and reputation. Developers who remain anonymous might nevertheless be incredibly professional and devoted. Scammers can even be found within public teams. Instead of making a snap decision based on these factors, conduct an extensive investigation to determine whether or not the team has value.
Another thing to think about is if they’ve declared any partnerships or collaborations. These might be collaborations with other businesses or partnerships with well-known and well-received developers with a track record.
2. The Community
If you ask anyone why BAYC is so successful, they will almost certainly respond that one of the reasons is because of the community. People like the BAYC logo and proudly display their Apes as profile images and on goods.
When picking a project to invest in, look for a community trying its best to represent the collection and, even more importantly, to drive it forward.
However, keep in mind that the NFT community is mainly based on Discord, and many projects utilize bots to inflate the community and make it look more lively. Bots are easy to recognize if you conduct a thorough study.
Participate in talks and watch how individuals act to determine their quality.
Community is the new currency.
3. Roadmaps
Good projects have well-thought-out schedules. Although this isn’t always the case, and this isn’t to claim that all excellent projects begin with a plan, it’s more often than not.
Look for enormous claims in incredibly short timelines to assess the roadmap’s feasibility. If you see something similar, you might want to reconsider your decision. Good projects expand slowly and steadily, preferring quality over quantity and not relying on every new code release to raise their floor price.
4. Unique Artworks
Finding one-of-a-kind artwork used to be a good bet, but that’s no longer the case. It must be identifiable, even if it is a rip-off. The Bored Ape Yacht Club, for example, created a new NFT collection and airdropped it to BAYC members — the Mutant Ape Yacht Club. Despite being a derivative, BAYC NFTs may likewise be treated to the Mutant Serum and transformed into mutants. MAYC, as it’s often known, has proven to be a tremendously successful collection.
Art is subjective; no two people see it the same way. CryptoPunks may not appear to be the most delicate artwork, but they may resonate with cypherpunks, coders, and builders. A carefully drawn NFT with all the intricacies may seem to you to be extremely attractive, yet the community may not receive it well.
Also, keep up with the latest trends – what may go viral?
5. Website
Again, with NFTs, having a convoluted string of features and beautiful graphics isn’t as necessary as you think.
However, it must demonstrate that the team thought about it and didn’t just throw it together in a few hours to make a quick buck.
6. Keep the Meme Culture Alive
While not every meme-based NFT initiative succeeds, it is a mistake to fade memes. It may not be based on solid economic logic, but it appeals to the masses. Furthermore, memes have become an essential component of the bitcoin business and cannot be disregarded.
It’s no accident that apes are represented in the costliest NFT collection, the Bored Ape Yacht Club. During the Defi summer of 2020, the slogan “let’s ape in” a specific cryptocurrency got widespread, and it became one of the most popular memes in the community.
The Degenerate Ape Academy, another popular collection on the Solana network, has likewise established itself as a bluechip initiative in its ecosystem.
7. Exclusiveness
BAYC went viral partly because it was unique. Because few individuals were aware that it was being released, it took around two days for the entire collection to be minted.
If thousands of people are battling to mint, the chances are that many of them are looking to sell it for a profit and re-list it. This rush is the current reality, and it seems a lot like the IDO mania from last year when people were battling to get on the allowlist and then market dump as soon as possible.
Furthermore, many corporations are joining the NFT arena – we’ve already seen Samsung, Adidas, Nike, and others participate somehow. See our feature on NFT sneakers.
This upcoming interest from big companies means that, as time passes, bluechip NFT collections will be those that were well-funded from the start, raising the bar for success.
8. On Which Blockchain Are They Based?
Ethereum is used in the vast majority of highly effective NFT collections. It’s also no surprise that the Ethereum-based NFT markets have a higher volume than the others.
Solana and other projects like Binance Smart Chain, Avalanche, and others are trailing them. Less popular networks have fewer buyers and sellers, which means less liquidity.
9. Celebrities and Influencers
It would be best if you also took this tip with a grain of salt since we’ve seen several celebrity-backed crypto ventures turn out to be total hoaxes. The most recent example, in January 2022, was a project called Ethereum Max, which was supported by high-profile celebrities, including Kim Kardashian and Floyd Mayweather, both of whom are being sued for their involvement.
To some extent, though, the inverse is also true. The Bored Ape Yacht Club has become so popular that celebrities like Justin Bieber, Eminem, Serena Williams, Steph Curry, and others wear the BAYC brand and possess an NFT.
Put another way; you must be extremely picky and ensure that you thoroughly investigate the project’s influencers and celebrities (if any). It would be best to think about their reputation before making this decision.
10. Price and Volume
After entering the open market, bluechip projects tend to do better than others in volume and pricing. Non-fungible tokens are just that. It also implies that, unlike cryptocurrency trading, you must find a buyer for your NFT – you cannot simply press the “sell” button to liquidate it.
For this reason, you should prioritize initiatives with high liquidity over those with low liquidity. If you join a collection with progressively falling volume, you run the danger of not being able to sell your NFTs and being stuck with them until a buyer appears.
11. Diversification of the Holders
The benefit of open NFT markets like OpenSea is that you can quickly see if a collection’s supply is highly concentrated or varied.
In general, you’d anticipate a solid initiative with a high number of supporters. Of course, one individual may register many ETH addresses and own multiple NFTs, but regardless of this, you want to see a large number of holders, making the series less centralized.
12. NFT Wear and Tear
Make sure to buy an NFT that has a low rate of wear and tear. The digital version of a product that becomes stale over time is not something you want to purchase. NFTs, a form of cryptographic art, may seem far off in the future, yet it’s easy to forget about them.
Physical art can be damaged over time due to light damage that causes dullness, paint cracks, or distortion caused by transporting the item of art. Because of this, museums spend millions of dollars each year to ensure that their artwork is housed in the finest possible conditions.
In the digital age, NFTs do not have the same level of security. The impacts of time on digital artworks are still a possibility. Over time, pixilation can cause digital ware including faded visuals, skips in content, and other issues with NFTs sold as NFTs.
Consider the long-term consequences of investing in an NFT or NFT company, or investing your time and money in creating NFTs. Today’s crypto art may not look as good in a few years as it does now.
13. Digital Art Theft
With the increase in the theft of NFTs, being up to date and aware of potentially risky NFTs is very important if you want to invest in an NFT that will give you peace. While blockchains are nearly impossible to hack and it is very unlikely for ledgers to be tampered with, art theft is not completely out of the question. Not only can ledgers and blockchains be disrupted, but the possibility of impersonated artwork is very real as well.
Artist Derek Laufman spoke out on Twitter about how easy it is for buyers to be scammed on the NFT platform. He claims that this goes against the whole appeal of the platform, as blockchains are supposed to involve verified artists’ works.
Before buying NFTs, it is important to consider the dangers of blockchain ledgers that might not be advertised.
14. Constant NFT Flipping
As an investor, you should be cautious flipping NFTs. Investing in NFTs is a whole new ball game, therefore this advice is critical.
When you acquire an NFT at a discount and then sell it for a greater price, you’re basically “NFT flipping.” Doing so will necessitate keeping track of impending NFT releases and searching for the greatest new ideas.
Flipping NFTs necessitates a lot of research and immersion in the NFT market, therefore the mantra “buy the rumor, sell the news” is pertinent here. The Moonbird NFT comes from a well-respected team, but its mint price was astronomically high, so be cautious even if you do your research. If we’re being honest, it’s really difficult for investors to flip NFTs unless they put in a lot of time each day.
15. Copyright and Utility
Check the roadmap before the mint; this study helps determine a project’s utility. Simpler if it’s already out there – what is the team doing for its NFT holders? Savoring the mint’s revenues or vigorously increasing the initiative and its applications?
While exclusivity may entice engagement, the utility would have long-term benefits. They lavishly rewarded BAYC holders, which resulted in two collections that were either airdropped to existing holders or allowed to mint exclusively for them, increasing value.
As a holder, you may be entitled to something other than a non-fungible JPEG. No need to be a lawyer for copyrights, but each NFT collection decides what to allow and prohibit. Consider the case below.
Owners of NFTs are free to do whatever they want with them as long as they can verify ownership. However, some collections restrict or charge their owners for the use of their NFTs. A bit further research on the project’s website can easily prove this tip.
NFT Tips Summary
Non-fungible tokens have firmly established themselves in the cryptocurrency sector, and there’s little question that they’ll be there for a long time.
However, as the buzz grows, so do the frauds. Hopefully, the following advice will come in handy when selecting a collection to dive into investing in NFTs.
Like any other investment, ensure you properly research the NFT project or collection you want to invest in or risk buying worthless JPEGs.
None of the above is financial advice. Do your own research.