NFT has become quite popular these days. This is evident by the fact that the blockchain industry is fetching billions of dollars from trading such digital assets. The NFT market is apparently exceeding $41 billion. However, recent downtrends may have given a different indication. Regardless, everyone wants to cash in on NFTs. Let’s see how you to buy and sell NFTs for profit.
Conduct a thorough market research
Before hopping straight into NFT Space, it is important that you understand the notion of NFTs, what are they, and how digital assets are traded. It is important for investors to conduct thorough market research before thinking of buying or selling NFTs. This will help acquire information regarding the values of different tokens and assets.
While conducting research you have to make sure you analyze the details of the founding company. For Instance, BAYC NFT Collection’s parent company is Yugalabs. Hence, if an NFT has an impressive track record for tokens, then, their NFT Collection will also be a success.
In addition, the majority of tokens go viral because of celebrity endorsement.
Flipping NFTs basically means you can either buy in for short periods or long periods of gains. This is quite similar to traditional investments. The only distinction is that the chances of earning profits are more when you flip NFTs.
Thus, after carrying out thorough research, you can flip an NFT and profit from the gains made through short-term investment. Most of the profits from the gains are made by short-term investments. This is mainly because NFT Market is a galloping market and a token might not remain popular or relevant for longer periods. Terra Luna is the perfect example of such a case.
Holding an NFT
Holding an NFT is an alternative strategy for flipping NFTs. Here traders invest from a long-term perspective. This means that the NFT (depending on its category) might see a significant rise in its worth in long run.
Hence, as an NFT trader, you need to follow the viral trends that might stay in the NFT Market for a while.
Further, Non-fungible tokens are worth even more after minting. The value keeps increasing over time. The best suitable tokens for long-term investment are evergreen tokens. Thes are not based on seasonal trends. Jack Dorsey’s first tweet on Twitter is an ideal example of a token to hold for a longer period.
The majority of tokens that fall under the evergreen category usually include Artwork. The reason is simple, art is timeless and it is always worth more as years pass by. The backlog of holding an NFT for the long term is that you may face severe losses at times.
Also Read, Best NFT Coins for earning passive income
There are various types of NFTs, and they all come with benefits that one can have after they make the purchase. Most beneficiary tokens provide access to groups or associations with limited membership availability.
Each member of such a private group is required to hold an NFT of a particular founding team. These tokens provide access to NFT Markeptplcace, virtual discussion platforms, meetings, or limited-edition merchandise.
Irrespective of numerous benefits, as long as it is valuable, the overall value of an NFT will increase. Thus, look for tokens with valuable unlockables and flip them for a higher price. You can even use these unlockable tokens in the meantime if you fail to find a potential buyer. Because in this way you will receive more from that NFT transaction and benefit from the unlockables and also by selling the token.
How do you buy NFTs?
Transactions of NFTs are different from normal fiat currency transactions. It is done on a highly secure blockchain platform. To buy an NFT you need to register yourself on a marketplace create an account and signup for a digital wallet such as Ethereum. There are only a few NFT Marketplaces that are trustworthy and you can buy and sell NFTs. Further, these tokens are also authenticated before being uploaded to the marketplace.
Your crypto wallet needs to have a sufficient balance for carrying out transactions. You can choose any of the two options i.e minting or buying it on secondary markets. Minting an NFT as mentioned earlier will provide higher returns rather than trading on a secondary market. Because, at times, the Secondary marketplaces may hold overpriced tokens that won’t provide high returns and instead lead to critical loss.
Categories to pick from
NFTs have different categories. You can pick your NFT from the prevailing categories such as Art, Games, Music, and Memes. There are other categories like major sporting events as well. The mentioned categories do not cover the complete NFT Market but provide you with scope for trading. The important factor here is that you pick the NFTs for buying or selling as per your preference and interests.
However, it’s your responsibility to conduct research on multiple categories before trading NFTs.
If you play it right, then NFTs have the potential to provide high returns on investments. The trick to buying or selling a token for profit lies in research. Of course, at times your instincts are all you need for trading but the market is volatile and risky so it’s better to be safe.
Also, observing the recent crisis surrounding crypto exchanges, exploits, and other issues it’s difficult to even sustain the funds that are already existing in your wallets. So, it seems like at this point in time they are not worth investing but the community is optimistic as brands and companies continue their foray into the NFT Space despite the NFT Market collapse. Trade carefully!!!
NFTHI does not recommend any kind of Investment in NFTs or NFT trading. All the strategies are merely educational references.
Conduct thorough research before you start with NFTs