NFTs’: To invest or not to invest is the question!
Many investors believe NFTs to be a bubble and a growing fad that will die with time. Similarly, when crypto came into being received a lot of FUD (FEAR, DOUBT & UNCERTAINITY) it managed to capture the faith and interest if people over the years.
What are NFTs?
NFTs also known as Non-Fungible Tokens are digital rare assets held on a secure blockchain. These assets are non-interchangeable (non-fungible) and are comprised of unique properties entailing the asset.
What are the kinds of NFT?
NFTs can be digital cards, 3D objects, videos, GIFs or any other item that can be digitally presented on the ledger. We have seen scores of NFTs sold for millions of dollars over the last two years. According to a survey, the NFT market has surged to a whooping 328% between Q1 and Q3 of 2021. The NFT market’s value is expected to reach $80 bn by 2025.
The NFT phenomena is not a new one. CryptoKitties was the earliest to experiment with gamification of assets on the blockchain. It will interest you to know that NBA TopShot is also powered by Dapper Labs.
Debunking a myth around NFTs’: There. maybe multiple copies of an NFT. However it is essential to know that the NFT asset’s properties differ from each other.
So, the bottom-line? NFTs’ are unique. When you buy an NFT you become the sole proprietor of it. The proof of ownership can be verified on the blockchain it was minted on.
NFTs can be deemed as a good investment if one has done a meticulous research of the creator and his or her history of NFT transactions. You can check the NFT creators overall presence on the web.
Some of the NFT investment determinants are as follows
- The price at which the creators have listed their NFT for. Too low a price may be seen as a garage sale by the creator or overpriced NFT is also a red flag unless the digital asset is really worth the price
- Creator’s overall NFT reputation across marketplaces or how many times his or her NFT has been resold.
- The creator’s profile and how articulately they have detailed their NFT’s description and properties.
- If you find an artistic piece of art on a marketplace, don’t go bonkers to buy it straight away! Check for more NFTs on the marketplaces, compare them, shortlist a few and then invest in the best.
Pro Tip: Just like investing in stocks and equities of potential companies while the market is bearish, same is the case with NFTs’.
When a creator drops an NFT on the marketplace or when a piece of quality NFT is selling at a low cost, buy it!
What’s the scope of yielding gains with NFT investments?
DeFi is opening up avenues with projects like stater providing liquidity via NFTs’ can help you earn or borrow ETH. With the ever widening scope of NFTs one can expect innovative NFT+ DeFi business models to emerge across different blockchains and catering to specific marketplaces.
To sum up, the NFT bubble is only going to grow in the era of Web 3.0 with the unfolding of Metaverse alongside the NFT markets that have sprung lately.