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Everything you need to know about investing in NFT art

Everything you need to know about investing in NFT art

  • 1 September 2022
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The non-fungible token (NFT) industry has grown exponentially over the past year, with many implications. The general thinking is that non-fungible tokens are permanent and are going to play a central role in sub-sectors, such as blockchain-based gaming. However, with a little digging into the NFT world, you will undoubtedly notice an increase in the number of fake projects and scams, making it very difficult to choose an NFT portfolio that has a chance of success. With this in mind, we’ve taken this opportunity to provide you with some key tips on investing in NFT art. Stay with us in the future.

Important points of investing in NFT art

Before getting into NFT investing and staking, as well as to better understand the NFT pricing process, there are some things you should know. In this episode, we explore eleven important things you need to know about how to invest in NFTs. These points are:

Expertise and reputation of the team

Instead of focusing on the identity of the NFT collection team, focus on their achievements and reputation. Developers who remain anonymous can be incredibly professional. We suggest you do extensive research on the developer team and their history before investing. Also, look out for the creative team’s partnerships and collaborations with other well-known companies and artists.

Society

When choosing a project to invest in, look for a community that is doing its best to drive the NFT community forward. However, keep in mind that the NFT community is primarily based on Discord, and many projects use bots to grow their community and make it more lively. If you do a close inspection, these bots are easy to spot. Community is the new currency in the cryptocurrency world.

NFT art Road map

Good projects have well-thought-out plans. Successful projects expand slowly and steadily, prefer quality over quantity, and don’t do anything to increase their price. If a project doesn’t have a roadmap, make decisions about it more carefully.

NFT art website

It is not necessary to have a website with beautiful graphics for the NFT portfolio. However, the website is the face of any project, and a poor website indicates that the development team is only looking for money.

The blockchain of each NFT art

Ethereum is used in most of the highly effective NFT portfolios; So it’s no surprise that Ethereum-based NFT markets have more volume compared to the rest. This higher volume means easier buying and selling for you who plan to invest in NFT art.

Support from celebrities and influencers

You have to be very sensitive, make sure and thoroughly check the influencers and celebrities of the project (if any). We have seen several projects supported by celebrities, which did not have the expected value. The most recent example, in January 2022, was a project called Ethereum Max, which was backed by high-profile celebrities including Kim Kardashian and Floyd Mayweather, both of whom were sued for their involvement in the scheme.

However, to some extent, the opposite is also true. One of the most famous NFT projects, The Bored Ape Yacht Club has become so popular that celebrities such as Justin Bieber, Eminem, Serena Williams, Steph Carey, and many others use the BAYC brand and own NFTs from this collection.

Price and volume

After entering the open market, blue chip projects (safe investments that will have a guaranteed return in the long run) outperform others in terms of volume and price. NFTs are the same way. Unlike cryptocurrency trading, you need to find a buyer for your NFT before you can cash it out.

For this reason, you should prioritize collections with high liquidity over those with low liquidity. If you join a pool that gradually decreases in volume, you may not be able to sell your NFTs.

Variety of owners

It is better to enter a collection that has many diverse owners. The good thing about markets like Opensea is that you can quickly identify the dispersion of holders of a collection. Investing in collections with diverse owners is done more easily.

Theft of digital artwork

If you plan to invest in NFTs, it is important to stay up-to-date and aware of potentially dangerous NFTs due to the increase in the theft of NFTs. While hacking the blockchain is nearly impossible and tampering with the ledger is highly unlikely, theft of digital artworks is not that far-fetched. Not only can the ledger and blockchain be disrupted, but the possibility of forgery of artwork is also very likely.

Continuous flipping of NFT

When you buy an NFT at a low price and then sell it at a higher price, you are flipping an NFT. Doing so requires following the impending release of NFTs and searching for the best new ideas.

Flipping NFTs requires a lot of research and immersion in the market. The phrase “buy the rumor, sell the news” provides an excellent example of this. The reality is that NFT flipping is difficult for investors; Unless they spend a lot of time on it daily.

Copyright laws and publisher’s rights

The next question you should ask yourself when investing in NFT art is what does the developer group do for their NFT holders?

A tool like an airdrop or publisher’s rights is another key issue to decide on the collection in question. It is necessary to carefully examine such a tool in each set and the roadmap of its development team to benefit NFT holders.

investing NFT art

Pros and cons of investing in NFT art

Up to this point in the article, we talked about the important points of investing in NFT art and the valuable collections available in the market. Now it’s time to get acquainted with the advantages and disadvantages of this investment.

Advantages of investing in NFT art

  • Anyone can invest in NFTs.
  • The ownership of NFT is guaranteed by a blockchain.
  • Learning how to invest in NFT is an opportunity to learn more about blockchain technology.

Disadvantages of investing in NFT art

  • Contrary to popular belief, NFTs are not an asset class; Rather, it is a method of registering digital ownership. Such wrong beliefs cause extreme price fluctuations in the market.
  • NFT production consumes a lot of energy.
  • With most of the NFT market volume limited to the Ethereum network, you’ll probably have to buy ETH.

Good NFTs for investment

If you are researching investing in NFT art, in addition to learning how to buy and sell NFTs and learn about trading markets and the best NFT wallets, you need to have an understanding of the top NFTs on the market. Below, we’ll look at three of the best NFTs you should know about.

CryptoPunks

When researching how to invest in NFTs, you’ve probably come across the name crypto punks many times; One of the first NFT pools launched in 2017. However, with the peak of NFT market activity, crypto punks were considered premium assets for pioneering the market, and many have since sold for millions of dollars.

Bored Ape Yacht Club

Bored Ape Yacht Club is a collection of ten thousand NFT artworks depicting bored monkeys. Although this collection was underestimated at the beginning of its launch; These monkeys became known as a status symbol and many famous people and prominent names were involved. Bored Ape Yacht Club NFT sales have now surpassed $1 billion thanks to investors like Eminem and Snoop Dogg.

Mythia

Mythia is a collection that is definitely worth paying attention to. This collection contains 3333 unique pieces of art featuring cyberpunk and anime characters. However, Mythia’s appeal mainly comes from its additional benefits. All owners of this collection will get access to exclusive Discord servers and will be notified of the release of new highly capable NFTs. Owners can also access a suite of software tools that simplify the process of investing in NFT art.

The future of investing in NFT art

The future of NFTs, like many other blockchain experiments, is uncertain. According to reputable journals, NFTs are not leaving the market anytime soon, and now, with wealthy investors entering the field, even more expansion can be predicted for the NFT industry.

According to some crypto investors, the next big thing in the NFT industry will be membership cards. “Alpha Pass” is the special term now used for these membership cards. These cards allow you to enter certain channels on the Discord platform and use the exclusive news and confidential information contained in these channels about NFTs.

Also, with the addition of the possibility of selling the license (permission to use) assets, without giving up their ownership, NFT can lead to a revolution in the music sales industry.

NFTs can include game sprites (Game Sprites are a picture you made of the game character. For example, in a game where the main character is a bird, we call the image that entered the game engine a sprite), the music you recorded, photos you take, prominent user accounts on various sites and forums, and pretty much anything else you can think of. Seeing the scale and growing market of this industry, it is safe to say that in the future, we will come across other ways to invest in NFTs.

A final word about investing in NFT art

While you can undoubtedly make huge profits from investing in NFT art, there are several mistakes you can make in the buying and selling process. Now, more than ever, cybercriminals are exploiting the NFT market. Also, some NFTs in the market are not worth buying at all; So, before making any trade, make sure you check all the factors mentioned in this article.


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