how-to-invest-in-nft

How to Invest in NFTs?

NFTs (non-fungible tokens) have ushered in a new era of crypto investing, with thousands of NFT collectibles traded across various marketplaces daily. Buying and keeping the right ones at the right time has made numerous overnight millionaires.

You, too, can take advantage of the NFT craze to buy NFTs low and sell high (a process called flipping). 

NFT technology: What are NFTs?

NFTs stand for non-fungible tokens. NFTs are unique, irreplaceable, mostly digital items that people buy and sell online. It can be a piece of art, music, photography, tweet, or even virtual property inside a game. They are created by tokenizing (minting) digital items on the blockchain. This gives the digital collectible proof of ownership, thus ensuring that it can’t be deleted or counterfeited once a token is created. The most recognized blockchain platforms for minting NFTs are Ethereum, Solana, and Polkadot.

This ownership right is essentially transferred to you when you buy an NFT on a marketplace like OpenSea. The NFT, therefore, acts as a certificate of ownership of the item. 

NFTs can be stand-alone or part of a collection, allowing their owners to feel like joining an exclusive online community.

Can I invest in NFTs?

NFTs can be a great investment avenue, as they appreciate in value over time due to their scarcity and creator. However, before investing in NFT art, it’s essential to understand who created the asset and how many were created. Also, it’s crucial to confirm the authenticity of the item. 

How to invest in NFTs?

The best way to make money from NFTs is through flipping. Just like any other asset class, you can invest in NFTs by buying low and selling high  (leveraging on the rising and falling of the crypto market). For instance, in October 2017, NFT CryptoPunk #8348 was sold for $456. The same NFT was sold for 84 ETH ($169,490) two years ago and received an offer of 60,000 ETH ($119 million) in 2021. 

You don’t need to have a lot of money to start investing in NFTs. Just identify the NFT you want to invest, fund your wallet, and buy the digital collectible on the marketplace. You often need an Ethereum-compatible wallet containing Ether to buy an NFT. 

1. Minting

Minting refers to purchasing NFTs as soon as they are released before they are available on the secondary market. This is great because most NFT projects provide their collections at extremely low costs, or sometimes for free, allowing you to maximize your profit margin.

However, because of strong demand and limited availability, quality NFT projects are extremely difficult to come by. That’s why most NFT initiatives create whitelists, so early backers may be assured of minting access once the collection is live.

Join the project’s Discord group to learn about the project’s qualifying requirements as well as the date and hour the NFT collection will go live.

You may easily transfer the NFT to secondary marketplaces like OpenSea and sell it for a better price once you’ve minted it.

⭐️ Read more on: NFT Minting

2. Buying on secondary markets

Assume you’re running late and don’t have a mint. The NFT is still available on the secondary market. OpenSea, Robinhood, Crypto.com, Coinbase, Binance, Rarible, and others are among these platforms.

Consider the case of OpenSea. Here’s what you should do once you’ve arrived at the website: :

The ‘Trending tab’ on the website will show you the most popular NFTs, or you can key in the collection’s name if you already have one in mind. Click Items, then Buy Now, and set Price: Low to High once you’re on the project’s page. This will display all of the NFTs that are currently for sale.

Look for NFTs that are currently undervalued and that you believe they will increase in value in the future. If the prominent NFT you see after completing the previous step is priced at 0.03 ETH and the ones after that are priced at 0.05 ETH, you may know that one of them is undervalued. That’s your opportunity to buy for 0.03 and perhaps sell for more.

Choose the individual NFT you want to flip and then click Properties. Here you may see your NFT’s qualities as well as its rarity. The higher the value of your NFT, the rarer it is. To start flipping, connect your wallet (make sure it’s funded) and buy the NFT.

It is important to ensure the project has enough liquidity before you get too enthused. To examine how many people are listing products against how many people are actually buying, go to the Activity page and pick Listing and Sales. In an ideal world, transactions should occur every few minutes. You’ll have an easier time finding buyers for your NFTs if the trade volume is large.

How to sell your NFTs? 

Once you purchase an NFT, the digital asset belongs to you, and you can do as you please. You’ll be able to keep it as a collectible, display it for others to determine, or flip it for profit. All you need to do is to make sure your collections are purchasable.

To sell your NFT, simply upload it to your marketplace of choice. Confine mind that the marketplace must support the blockchain the NFT was built on. From there, you’ll be able to opt to list it available at a group price or go for an auction-style sale during which buyers place bids. If you’re auctioning off the NFT, ensure you set the minimum acceptable price and, therefore, the duration of the auction. Additionally, you’ll add perks like concert tickets or a special congratulatory message to sweeten the deal. 

Is it profitable to invest in NFTs?

Yes, investing in NFTs can be very profitable, provided you invest in high-quality projects with enough liquidity. Having said that, it is difficult to figure out which digital collectible will increase in value and which one will not. This is because NFTs are a speculative investment. Value is usually uncertain and will fluctuate based on market demand. But identifying a promising project can pay off big later. Some digital collectibles that originally sold for petty values have sold for many thousands of dollars.

According to NonFungible.com, the best-selling NFTs in the past month are:

  1. CryptoPunks – Over $37 million in sales volume
  2. Bored Ape Yacht Club – Over $36.3 million in sales volume
  3. The Sandbox – Over $7.8 million in sales volume
  4. Doodles – Over $5.4 million in sales volume 
  5. Cool Cats – Over $4.5 million in sales volume

In conclusion, you can invest in NFTs in two ways: minting and buying in the secondary market. Whichever option you decide to follow, it is vital to consider the risks and costs in addition to the potential upsides of NFT investing.

Earn Passive Income with HI Staking

If you want to earn passive through investing in NFTs, you should also check other alternatives to create passive income through cryptocurrency. For example, you can earn up to 40% APY in interest, paid out daily, for staking your HI in various liquidity pools with the HI ecosystem. The HI from the daily reward will be credited to your account but will only be released at the beginning of each month. Moreover, you will need to buy HI to start unlocking (minimum of 100 HI). Once your rewards unlock, you can deposit them in Earnings and earn up to 40% APY. 

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