Speculation is an integral part of any successful investment. In the crypto space, speculation is essential as this market can be volatile and challenging to predict. The NFT marketplace continues to grow yearly, with new artists constantly entering the market. If you’re interested in investing in the NFT marketplace, here are a few tips for your success.
Non-fungible tokens are immutable records of ownership over a digital or real-world asset. NFTs are encrypted and can often contain a copy of the digital asset file. Though the NFT itself is not a digital asset, NFTs do unquestionably verify the ownership of an asset, making them essential tokens of exchange. NFTs are minted and secured on blockchain networks which are highly secure and impossible to tamper with. If you want to diversify your investment portfolio, investing in NFTs is a great way to add some digital assets to your portfolio.
NFTs can contain most file types; this has allowed for the formation of a digital art NFT marketplace that has grown tremendously in the last several years. NFT sales jumped from $95 million in 2020 to over $25 billion in 2021. By minting a work of digital art into an NFT, you are creating digital scarcity and adding inherent value to that digital asset. Digital artists in all mediums can now have greater control over their digital intellectual property. They can even opt-in to receive royalties as their NFTs are resold on the blockchain in the future.
The NFT marketplace can be challenging to maneuver, but there are a few ways that you as an investor can speculate and select the NFTs most likely to appreciate rapidly.
Joining an online community of crypto and NFT enthusiasts is a great way to get started in crypto and gain insights into the most anticipated nft drops. Public opinion is a great way to speculate on the value and longevity of an NFT investment. You can follow famous artists or celebrities as they create their NFT collections and bid on these assets as you see fit. Being a part of a crypto community like FTX is a great way to stay in the know on the latest NFT hype.
The rarity of an NFT is another excellent indicator of the success of an NFT investment. An NFT’s rarity score is determined by its unique, rare traits and the number of other versions of that same artwork that exist as NFTs on the network. There are various rarity tools, and many NFT marketplaces will automatically report rarities with listings.
The blockchain network your NFT is housed on is another great indication of the long-term payoff of that particular investment. The NFT will only be valuable as long as its blockchain is successful and actively utilized by crypto users. Most of the NFTs in the world are secured on the Ethereum blockchain, making it a very popular network for NFT exchange. Some blockchain projects like the Metaverse project aim to evolve the use of NFTs into a digital economic structure much like an in-game economy. Consider the direction of the NFT industry and how you can best invest for your future.
These are just a few considerations when entering the NFT marketplace. Speculation is key to your success but requires research and patients. Join a crypto community today and learn more about your options for NFT investments