The NFT market is growing at a rapid pace. It is changing the digital realm and pushing forward the decentralized economy in the global market.
As of 1st May 2022, around $37 million has been transferred from crypto wallets to NFT marketplace. The number is indicative of high NFT sales in the first 6 months of 2022.
No matter how glittery it seems from the outside, investing in NFTs isn’t simple. It doesn’t matter if you are an NFT artist or a collector. You need to be very cautious of the market sentiment. Moreover, you also need to focus on the quality, rarity, utility and creativity of your NFT tokens. Even your marketing strategy and pricing tactics play an important role.
These factors are very crucial in deciding whether your NFT finance will be a hit or flop.
Therefore, we have come up with this detailed guide on how to wisely invest in NFTs.
How To Start Your NFT finance Journey?
Everyone wants to dip their toes in the NFTs. Today we will show you how you can start your NFT investment journey and make it a success.
There are two ways to invest in NFTs. They are:
- Become an NFT artist
- Become an NFT collector
In both cases, there are a set of factors you need to focus on to taste success. We will discuss all the factors separately.
If you become an NFT artist, you will have more control over your art and can generate multiple income sources. You must be a creative person who can portray a unique perspective in his NFT art.
In case you want to be an NFT collector, you will always have to be on the lookout for prospective NFT projects with potential future. As a collector, you will make a profit only when you buy NFT early at low prices and sell them when its prices hike. For this, you will need to do in-depth research on the upcoming NFT projects and successfully predict whether the collection will be a hit in the market in future or not.
Now let us have a look at some vital factors you must consider before investing in NFTs.
Things You Must Consider Before Investing in NFT tokens
Here are the 2 most important factors that you must pay attention to before investing in NFT tokens.
Whether you are an NFT artist or an NFT collector, you must always keep your NFT safe.
Digital wallets not only keep your crypto funds safe but also secures the NFTs associated with the wallet.
There are different types of digital wallets in the market. You have the option to choose from hardware wallets to mobile wallets, desktop wallets and other software wallets.
You need to be very cautious while choosing a digital wallet. It is because both hardware and software wallets function differently.
Hardware wallets store your private keys offline. Therefore, doing away with the risk of hacks and thefts. On the other hand, software wallets store the private keys on online servers while prone to risks and system malfunctions.
However, software wallets are cheaper and more convenient to use than hardware wallets.
Moreover, you will also need to check if the wallet supports the blockchain network your NFT is built. Most of the NFTs are built on the Ethereum network. So, an Ethereum wallet will suffice your need.
However, today with the rising gas fees on Ethereum, people are shifting to alternatives like Polygon, Solana, Cardano and BNB.
That is why you must select a digital wallet that supports the majority of the top blockchain networks.
NFT marketplaces are like middlemen that assist NFT artists in creating and selling NFTs without any hassle. These marketplaces are also a great platform for NFT collectors to explore and find rare NFTs.
With advanced tools and technologies, NFT marketplaces simplify creating, selling and buying NFTs. You do not have to be a tech geek to create and sell your NFTs. All you need to do is to choose a platform, create an account and start minting NFTs.
However, not every NFT marketplace is the same. Some marketplaces like Mintable and Rarible are good for a specific category of NFTs. While OpenSea as the largest NFT marketplace is an exceptional place for all kinds of NFTs.
Every marketplace has different charges, and framework and attracts a particular group of buyers. So, it is very crucial that you choose your marketplace wisely.
The success of your NFT finance venture depends on several other factors like market demand, buyer sentiment, marketing and even on what the NFT offers to its owners.
You may apply all strategies and still fail to earn the profits you expected. However, you must never lose hope and patience.
With NFTs, you will need a lot of patience to wait for the right time. From increasing the listing price to finding the right NFT collection, buying early and selling at the right moment of a hike, you need to wait and grab the opportunity.