Non-fungible tokens (NFT) art has been a trend for the past few years. Some believe that NFT is a form of cryptocurrency (which it is not), and some claim that it is a fraud. The most straightforward explanation of NFT, however, is that it is more similar to digital contemporary art than to anything else. And for sure, art may be costly or cost nothing as well. So, if you want to invest in the NFT art and you are not a professional broker, you must learn some essential tips.
Pick what your heart chooses
Maybe it is a little sentimental, but that is what art is about. It is better to lose money but at least to own something you like than just lose your funds.
According to research by Hiscox Online Art Trade, 82% of those who buy NFT think only about future income and not directly about the product they are investing in. But with such digital intangible things as NFT, you never exactly know if its value increases or falls. Especially when you buy art from an unknown or little-known artist.
So, the income is important but you also do not have to be disappointed if you do not get any profit. At least, you may print the picture and admire it on the wall.
Picture: Chums
Remember that NFT is not about art only
It may sound ridiculous and controversial to all we said before, which is why it is a good tip. Look deeper into the NFT movement, and you will see what is behind the picture.
It may be some particular project, like a charity fund that helps people struggling during the war, or it may be some new feature for the metaverse, cinema, or education. NFT can give you access to some communities and open many more opportunities.
So, by purchasing a NFT you will not only buy a picture but do something that makes you feel better.
Picture: Clickable
Do not get caught up in loud promises
If your aim for investing in NFT is just to make big money, you are a target for cheaters. You want to come, pay for something, and then wait for the lucky moment to sell your NFT. In this case, you are not plunged into the market processes, and it is pretty easy to fool you with a real NFT value. Or even to use your data to get an access to your bank account, e-mail, etc.
What does the scam look like? For instance, somebody on social media may propose you buy “a gorgeous NFT from a very perspective artist” for a small price. They may say it is a promotion or they want to make you a gift. Another example is when somebody pledges to put a free NFT on your digital wallet and asks you for the wallet or bank details.
How to avoid being cheated? Our advice is: before buying any NFT, do some research. Learn about artists, projects, and sellers, and ask about them in NFT communities. And, of course, learn the NFT history. And then, only if you like the digital art, buy it.
Do not buy NFT if you have never invested before
To get income from NFT, you have to know a lot about the investing itself, the art market, the NFT market, selling psychology, and other specifical things. If you are not familiar with any of these, you almost 100%, in the better case, will not earn anything. Or even lose a lot of money.
NFT investing is one of the most complicated new kinds of funding. So, it is not for beginners. If you are really keen on NFT, you may start researching the technology and all around it. However, if you expect to catch a simple way to wealth, NFT is not what you need.
Meanwhile, if you do not mind playing a kind of NFT lottery to check your luck, read the first tip again.
Picture: Crazy Skullz
Do not forget to add gas fees to the NFT cost
As previously said, NFT is not that easy to invest in. One of the pitfalls is gas fees – payment for the energy spend while NFT creates. And also, if you convert one cryptocurrency to another to buy NFT, the fees may be even more prominent because of using another blockchain. Thus, it may happen that fees altogether will exceed the NFT price. Study this part of NFT investing before you spend any money.
Picture: Mavion
Analyze data and use special tools
So, after all, you have decided that NFT investing is what you need. In that case, you need to start you learning from the basics:
- Find several NFT artists you like, and find them on social media and messengers. What are they doing? Do they pay for promotions? Who buys their arts? What is the price of their NFT now? What was the price before? How much NFTs they sold, and so on. Use different tools and platforms to learn this and compare data. Such as Etherscan, Nansen.ai, OpenSea, and Dune.
- Look for NFT at a lower price. It may be some NFTs that lost their price because of some reasons (analyze it before buying) but they will grow again. It may be on a presale before the public sale. You can also look for new artists that are not famous yet.
- Do not buy rare, unique, scarce, or highly popular NFTs if you are just starting out. To get into NFT investing, choose something more superficial, not very expensive, and with lower risks.
- Track trading volume if you want to get short-term gains. So, you can understand what to buy and what to sell.
Picture: PROOF Holdings
Conclusion
NFT investing is very high-risk with no predictable market behavior. So, if you want it only because it is in trend and you think you can get a lot of money from NFTs, it is better to choose other investing tools. Therefore, if you are really interested in technology and ready to learn a lot of information, you may try NFT.
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