Non-fungible tokens (NFTs) have been recognized
as an interesting presence in the cryptocurrency world. NFTs can easily
tokenize physical and digital assets. This could create a vibrant new ecosystem
where market participants can trade art, music, in-game items, and more. NFTs
are also ranked as the most popular after virtual currencies, so it's important
to be aware of the details.
In this article, we briefly explain what NFT
investing is, and show you how to buy advertising investing in NFT today. We
will also introduce NFT investment options, such as NFT-related stocks and
NFT-related investment trusts.
the best NFT investment?
Those who are looking for something that will
grow in the future with virtual currencies may be very worried about NFTs.
Investing in featured NFT games, art or other
projects seems interesting. It is important to first gain a broad understanding
of what NFTs are and how NFT investments work. NFT stands for
"Non-Fungible Token" and refers to a digital token used to confirm
ownership of a specific asset. NFT trading volume tends to be digital art,
music, and blockchain game items, but any asset is fine.
NFTs are hosted on the blockchain, the
decentralized network that underpins many cryptocurrencies. Bitcoin was the
first to popularize blockchain technology. But since then several compelling
networks have developed to build on the foundation that Bitcoin laid. Ethereum
is one of them, and the Solana, Cardano, and Binance smart chains are also
heavily involved, but it has become the leader in the NFT space.
If you are interested in investing in NFTs, you
can do so using the NFT Marketplace. Offering NFT marketplaces offer
easy-to-use online portals where investors can browse NFTs created by other
users and buy them if they wish. In most cases, NFTs are offered at a fixed
price or in an auction, where investors can bid until someone wins. NFT.
NFT is based on the cryptocurrency ecosystem.
Hence, it is necessary to obtain a wallet to store NFTs and to store the
cryptocurrencies required for smooth transactions.
So, are NFT Art and NFT Games good investments?
There are currently many non-fungible tokens in the market. Utility NFTs, like
NFT horse racing schemes and NFT land schemes, make it difficult to make the
right decision. Some providers have even started offering NFT gifts as a new
Here, let's dig into five key points to keep in
mind when researching how to invest in NFTs.
Increased potential value
One of the main attractions of investing in the
NFT industry is the potential appreciation that can occur over time. A prime
example is CryptoPunk 1422, which was purchased in 2017 for $74. However,
BusinessInsider recently revealed that this NFT was sold for $2 million in
October 2021. This example suggests that many NFTs have the potential for
dramatic price increases.
Access to exclusive bonus content
Investing in NFTs can give you more than just
great art and music, you can also get exclusive bonus content. A common example
is an NFT collection creator inviting owners to an event or offering additional
NFTs via Airdrop.
Join an exclusive community
High-end NFTs often allow their owners to
participate in an exclusive "community" that sets a certain value for
their assets. A famous example is the Bored Ape Yacht Club, which runs a
Discord server where other Bored Ape owners, including celebrities and public
figures, gather. Ownership gives you access to our community-driven message
board and bathroom.
It's also a good idea to buy and invest in
recommended NFTs to support creators. NFT is a wonderful mechanism that allows
creators to publish their work and allows fans to support them by purchasing
Showing ownership is easy
Since NFTs are "non-fungible" by
design, many NFT owners display their assets as profile pictures on social
media. NFTs cannot be copied because their ownership is fixed by blockchain
Understanding high-value assets are very
important when investing in NFTs. Here are five types of NFTs that are
particularly recommended and why.
invest in the Metaverse – Metaverse NFT
Another popular way to invest in the Metaverse is
through NFTs. The best NFTs of the past years have become part of
metaverse-based projects due to their valuable features. One of the things that
makes NFTs attractive from a metaverse perspective is their ability to provide
"true" ownership of the assets in play.
For example, the game-playing cards in the
Metaverse game "Gods Unchained" are structured as NFTs. This ensures
that all player cards are theirs and cannot be stolen or tampered with. This
dilutes the concept of cheating and hacking and keeps them out of the game.
in NFT-related stocks
Buying an NFT gives you direct access to a
specific asset. Investing in NFT-related cryptocurrencies gives you access to
cryptocurrencies that power the economics of NFT projects. If you want to
invest in the broader NFT sector, you should invest in NFT-related stocks. As
their name suggests, these companies have direct or indirect exposure to the
NFT sector, allowing equity investors to invest in the growth of the sector.
NFT stocks include brands that create NFTs and
sell them on respected marketplaces, as well as game companies looking to enter
the NFT space. Currently, many companies are not using NFTs as their business
model, but this may change in the future. Check out our top 10 picks for
Metaverse stocks for diversification.
Like buying Bitcoin, investing in NFT companies
is still highly speculative. Because the NFT market is relatively young
compared to other markets, investors are still trying to understand the
intricacies of how asset prices are affected by specific factors. As such,
buying shares of this company may be more attractive to risk-averse investors
than to risk-averse investors.
NFT-related stocks a good investment destination?
Even if you're only interested in investing
directly in NFTs, buying NFT-related stocks can give you exposure to a broader
market. But, just like buying cryptocurrency, entering the stock market in this
space tends to be more volatile than buying existing stocks.
That said, there are several advantages to buying
NFT-related stocks. These are:
Gain Broad Market Exposure: Investing in NFT
stocks like Coinbase gives you broad exposure to NFT market growth. Thus, if
the market expands over the next few years, it could have a positive impact on
Coinbase's earnings and drive the stock price higher.
A "safer" way to invest in NFTs: As the
stock market is established, investors may feel more comfortable buying
NFT-related stocks rather than buying NFTs directly. Also, while the stock
market is highly regulated, the NFT market is not.
Easily accessible in fiat currencies: Listed NFT
stocks can be easily bought and sold through trusted brokers. Additionally,
these brokers deal in fiat currency, so you can buy stocks instantly by linking
your credit/debit card.
NFT Investment Trusts are securities that track
an index of NFT-related stocks. Holdings include trading platforms such as NFT
marketplaces, blockchain networks where NFTs are issued, and companies
committed to commercializing NFTs.
Among these assets, it should be noted that they
do not actually trade NFTs. NFT Investment Trust invests only in companies that
are somehow related to NFTs and does not buy or sell NFTs.
NFT mutual funds are a very recent development.
Given the high level of interest in these digital tokens, we may see more NFT
mutual funds in the future. However, don't expect to see a large influx of
funds anytime soon. Despite the popularity of cryptocurrencies, the number of
cryptocurrency mutual funds is limited. NFT investment trusts will take time to
Defiance ETF is the first company to launch an
ETF for NFTs. The Defiance Digital Revolution ETF holds over 30 stocks and has
a low expense ratio of 0.65%. Its largest holdings include GameStop, Funko,
eBay, Coinbase, and cryptocurrency mining company BIT Mining Ltd.
In this article, we have thoroughly explored how
to invest in NFTs. We've tried to cover all the basics related to NFT investing
and show you how you can get started today. You can also invest in NFT-related
stocks and NFT-related cryptocurrencies.