Is Investing Money in NFT a Good Idea?

There has been a considerable deal of discussion about how NFTs could do over in the long term. The market for non-fungible tokens or NFTs remains hot. Nonetheless, this market has cooled off a bit since its last hot state.

If recent sales are any indication, expectations are rather remarkable. For instance, the sale of Beeple’s digital artwork, ‘Everyday: The First 5,000 Days’ for a whopping $69.3 million highlights that. Questions remain about what NFTs are and whether they are a great financial investment these days. After all, buying into an acronym you don’t understand is not a great idea. Let us dive into NFTs and how investors like you can potentially invest in this growing NFT market.

An NFT is a type of cryptocurrency like Bitcoin used in the crypto market. However, instead of holding money, they contain assets such as music and art. A fungible token is a property, which can be exchanged on a one-on-one basis. Like currencies, they can be traded freely, as each one has the same value. By contrast, NFTs have their unique worth, like a classic car or an old house.

Those are efficiently digital certificates of ownership, which can be connected to digital art, or anything else that’s accessible digitally: animated sticker labels, videos, audio files, or even this post you are reading right now.

Are NFT a good investment?

NFT is distinct, which is in line with the vital requirement of the average art market. Every artwork is handmade by an artist, but the world can never see two similar works of art. Those unique artworks, together with the history of human beings, created a market that can endure the test of time. What’s more, NFT has included the following features to the traditional art market:

  • Divisibility

The expensiveness of standard artwork makes it impossible for ordinary people to invest in and profit from the appreciation. Blockchain is the popular solution to this issue. You can’t tear a painting and sell it individually. NFT digital artworks can be personalized to cut into pieces to minimize the threshold of entry. Many people can earn together from the artworks’ appreciation and bring more liquidity at the same time through crypto investing, offering the artwork higher value.

  • Liquidity

One of the essential factors identifying whether a commodity is an excellent investment is its liquidity. It’s very much the same as real estate, a still underestimated asset class before the emergence of the second-house housing market. There’s a constant stream of new users joining the market later awakened to the houses’ value because of the rise of the second-hand housing market and the relevant transaction service personnel and platforms. Hence, the level of liquidity can substantially identify the ultimate market potential.

  • Anti-counterfeit

What makes blockchain appealing is its total decentralization. All the data on the chain is entirely transparent and can’t be tampered with. One of the key points in the standard art market is how to determine authenticity.

The high value of artwork has gained many counterfeiters, and the ever-changing strategies have made it challenging to tell the real from the fake. Even the most skilled artwork appraisers can’t ensure their judgments are entirely correct.

Can you make money with NFT?

Yes, of course. However, remember that not all NFTs are made the same. Some are worth a fortune, while others can be completely worthless. Here are some lucrative ways people and companies can make money during the present NFT gold rush.

In fact if you don’t know what you’re doing – there is little separating investing in cryptocurrencies or NFTs from gambling. Some would argue that you’d be better off looking for new casinos to play with and using their welcome bonuses than investing without doing your research.

  • Licensed collectables

Tokenizing your collectables seems like the most prominent and natural use of NFT technology. Sports cards project enabled people to trade license cards of footballers. Recently, the NBA has launched its NFT cards collection.

  • NFT video games

Gamers are known to spend fortunes on virtual items. Call of Duty, World of Warcraft gold boxes, or Counter-Strike skins—all those markets are worth billions already. If any major video game company considers selling in-game items as NFTs, the effect of such a decision on blockchain and gaming ecosystems would be massive.

  • Digital artworks

Individual artworks are by far the most significant NFTs ever made. The history of blockchain technology changed forever on March 11 as Christie’s—one of the highly sought auction houses in the globe—sold an NFT work of art for $69 million! That was the first time the auction house auctioned a digital asset.

Does NFT increase value?

If the correct balance is made, developers can raise the worth of non-fungible tokens and attract new users. Take note that the scarcity of speculation and supply determines valuation. The former can be guided by adding price performance charts on non-fungible items or showcasing non-fungible tokens that appreciate value. Future cash flow is the royalties or interest earned by the original owner of the collectable assets.

What is the best NFT to invest in?

NTFs are still in exploration, but their growth has allowed us to list the top crypto NFT to invest in 2021. These include the following projects.

  • NBA Top Shot – a blockchain company centered on NBA players
  • OpenSea – a peer-to-peer NFT marketplace for non-fungible tokens
  • Decentraland – a virtual platform for digital assets
  • CryptoKitties – a game centered around collectable creatures
  • Worldwide Asset Exchange (WAX) – a platform for creating, buying NFTs, selling, and virtual trading items
  • Hashmasks – a living digital art collectable

To sum up, NFTs are a remarkably embryonic investment these days. Suitably, that’s a highly speculative place to invest, but it’s not something an average or beginner investor can broach today. Remember that the stock market is risky and one must make any investment with utmost caution.

All the contents in this blog are only for your information of NFT and don’t constitute any investment advice. After all, risks come from not knowing what you’re doing. Where this industry will eventually lead is anyone’s guess. Nonetheless, what we know for sure is that the NFT field is undoubtedly an intriguing one today.

The post Is Investing Money in NFT a Good Idea? appeared first on Women Daily Magazine.



source https://www.womendailymagazine.com/is-investing-money-in-nft-a-good-idea/

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