A few years back, most people were interested in investing in stocks, gold, property, and such assets. However, with the introduction of Blockchain, things have changed a lot. Cryptocurrencies and everything related to them started to gain space in people’s investment portfolios.
NFTs have achieved significant success in many domains, also thanks to marketplaces that offer numerous NFT collections. Nevertheless, Not all of them are designed for the same type of use and with the same target users. In fact, the communities or companies behind the collections primarily target certain specific types of users and customers. Among the many variants, there are those who aim to make their product something exclusive by targeting a market of VIPs willing to spend significant amounts of money and at the same time act as an instrument to promote the collection.
To set an example, The Bored Ape Yacht Club is a collection of 10,000 Bored Ape NFT unique digital collectibles. The monkeys are mostly used on social media profiles, especially Twitter. Each Bored Ape is unique and programmatically generated from over 170 possible traits, including expression, headgear, clothing, and more. When they made their debut, a Bored Ape cost only 0.08 ETH. Today, the cheapest Bored Ape costs around 90 ETH.
The interesting thing about NFTs is that they hold a huge value just for owning that JPEG image. So, here is everything that you need to know about investing in NFTs.
The complete process of buying an NFT
If you have made up your mind and are planning to diversify with NFTs, but you are not sure of the process, here is your step-by-step guide. Whenever you go for buying or flipping an NFT, make sure that you do your research before investing your money. Checking for liquidity and activity is important to ensure reliability.
· Going to the NFT marketplace
Just like the websites for physical products, there are marketplaces where NFTs are sold. So, the first thing that you need to check out is the marketplace for buying your NFT. There are many options, but OpenSea is the largest NFT marketplace at the moment.
· Choosing the NFT
The next thing you must do is choose the NFT. Now choosing an NFT depends on different factors, and it is important to choose the right one when you are looking at it as your investment. We will discuss those factors later in the article, but for now, let’s say that you have chosen one NFT and are continuing the buying process.
· Preparing your crypto wallet
After doing proper research about your artwork details, you will be ready to buy, and for this, you will need to keep your crypto wallet ready. If you already have one, then you are good to go. Otherwise, you will need to open and fund a crypto wallet in order to make the payment transaction through this wallet.
· Buy your NFT
The last thing left in this process is to buy. It can be in different ways, like a virtual auction or even a fixed price. Depending on the requirements of that NFT, you can easily buy it provided you have your wallet funded with the cryptocurrency required, usually Ethereum.
What is to flip an NFT? Flipping is a common term used for buying low and selling high. So in this case we are looking at buying NFT when we think they are on its cheapest price, this is usually in the first market, meaning being the first buyer, of on secondary markets by creating a profit with the scaling price.
Flipping on marketplaces like OpenSea is the most common method. It is always open to the general public, and you can easily select any NFT and buy it from there. If you are early enough, you might also be on time to buy an NFT on its primary market. Here are the steps that you can follow:
- First of all, you may know which NFT you will buy and flip, or you can do your research about it.
- Next, you can search about the benefits and properties that will come with it, such as the description of the project and the traits and rarity of the artwork.
- Now you can be on the project page and go for the price filters to select the option that is perfect for your budget.
- Once you buy an NFT, hold it for some time, or post it on secondary marketplaces like OpenSea for flipping them. Just add your selling method and required price.
How to check which NFT will be the best for flipping?
If you are up for making revenue, then it’s important to know which NFT to buy because all NFTs will not be the same. So, here are some aspects to check when analyzing which asset to go for.
The utility value of that NFT
Apart from being a JPEG image, an NFT holds way more value for its owners. Owning an NFT means being part of that community, either by just supporting the founding team art, collaborating with the founding team on their roadmap, assuming its price will go high so you’ll get a profit, using it on the metaverse, or using it as profile picture on social media.
The founding team of that NFT
Next up, keeping track of the team that found that NFT is an important thing. Even if you are buying a collectible that is delivered to your wallet, make sure you check the founding team webpage and information.
Does that NFT associate with anything
Different NFT projects are partnering up with celebrities, companies, and brands for better success. It is among the best things to check for a better profit over your investment. The ones with better success rates will always leave you with more profit.
How is the community of that NFT?
The community of NFTs worldwide is also an important factor to keep an eye out for. Every trustworthy NFT project needs to have a presence on social media, especially on Twitter, so check their account to get to know more about them.
Artwork of the NFT
Lastly, you need to focus on the artwork. It does not need to be super clear or super vibrant. However, being distinguishable is what matters. For example, the CryptoPunk project had pixelated images, which was the base for its becoming an iconic NFT project. By keeping track of these things, you can easily decide which NFT has a better future and which one is worthy of your investment.