Before getting into NFT trading strategies, it seems that centuries-old paintbrush art is losing for digital art which never hang on wall! Houses are not filled with precious and well-known artifacts by Picasso or Rembrandt; nor their owners are looking for Mona Lisa from Louvre museum anymore! It is the 21st century and along with all changes to the world, attitudes to art looks like changing too. But how?
History is rewritten in world of art, this time based on digital art. Digital artists such as Beeple and Mad Dog Jones have turned to be the hottest creators in the world by dethroning traditional must-buy items. The names seem to ring any bells in minds; right! Digital artists have only recently started getting recognized, though they are making a good life out of their art while still alive. You may know the story of Van Gogh!
Here is no doubt that the race for digital collectibles is now hotter than ever and rich sellers may want to appreciate NFTs for the profit they brought up. Since they were introduced on the Internet, non-fungible tokens (NFTs) started governing the world of art, music, sports and games which opened a new realm of opportunities to almost all. Now let’s see why NFTs are selling like hotcake.
Simply saying, NFTs are certificates of authenticity which comes in form of unique ecryption code. Compare it with the traditional piece of paper that one gets after a purchase. NFTs are to be known precious and unique in that no one can hack or tamper them due to the power of blockchain technology, so that digital buyers and sellers are clearly identified and all transactions can be securely tracked. Therefore, fraud is virtually impossible. Owners can also be honored about having ‘digital rights’, which no doubt would appeal to many of the super-rich collectors owning hot digital assets. All these put no limit to how high can NFT artists rise – and just how expensive their talents can be priced at.
The realm of NFTs has place for all artists. In fact, it is the area which provides the opportunity not only for new-born artists be known and rise, but also for their art in digital forms. Some winners in this realm are Beeple selling his collection for $69 million, Blake Kathryn a leading 3D artist, Giant Swan 3D sculptor, and so on. Is there an end to this list? Sure not, since themes and domains are unlimited and the Internet made it possible to find art easily and invest on that even easier! Here we see how opportunities are made by new artists making use on NFTs and how buyers can take advantage of them. Also, we introduce most practical trading strategies use in the realm of NFTs by the winner of the field.
What you should consider while investing in NFTs
Although the process of trading NFTs seems simple, you should spend some time researching the market. There are certain fundamental issues you must know about to make a good investment. Let’s take a closer look at these fundamentals.
1. Market capitalization
Market cap is calculated by multiplying the total number of holders by the average price of one NFT from that collection. It gives you a good prospect of the NFT project in future and helps you make the right decision.
2. NFT scarcity
NFTs are unique digital assets, however they still differ in some attributes. Some NFTs in a collection seem to be rare and, as the result, more valuable. Although the rare NFTs are more expensive that the others, they are more likely to become more popular and valuable in the future. Rarity always guarantees the faster sell at higher prices. It is a good idea to use rarity tools to determine how rare an NFT is and then invest in it.
3. Unique holders of an NFT
Another important measure for valuable NFTs is the number of unique holders of the NFTs and their potential investment rate. The supporting community of an NFT determines the unique holders. It is the community that determine the profitability of an NFT as the larger the community, the more the investors. Also, thanks to discord, where the community meet, all the news including official and word of mouth goes around and members make a decision on the best reaction in the favor of the NFT collection they support. See! Community is so much important to win.
4. Development team
It is always important to check the reputation of the developer team. Spend some minutes to read about the past details of the developers involved in the project. Well-known developer teams with good record on sales from the previous projects provide more reliable NFT projects since not only they know the demand of the market based on their experience but also they show they are there in the market and do not rip you off.
5. Trading volume
It is also important to check the trading volume of an NFT project. Higher volumes always suggest the popularity of the collection and the increasing trend indicates a growing interest in it.
Trading Strategies with NFTs
Using the right NFT trading strategy is important for anyone who wants to succeed in the market. The goal of trading NFTs has always been to make huge returns. While there are several techniques to achieve this goal, we’ve selected the five best NFT trading strategies to guide your investment choices:
1. Buy the Floor
Non-fungible tokens are on their way to gain popularity and they seem to continue to exist for as long as possible. Keeping this in mind, you should consider buying NFTs at their floor price. Floor prices in the NFT market indicate the lowest price of a non-fungible token within a given category.
Sure it is not advisable to buy an NFT as it has a low price, though you may invest on a project based on your interest. You may consider to opt with rare NFTs over others and select the token with a floor price within that category. Buying the floor is a good trading strategy that allows enormous growth when the token becomes more popular in the future.
In simple words, buying the floors lets you secure an early seat in the token’s journey to higher growth.
2. Search for NFT’s Google Trends
Checking NFTs on Google trend, you can easily determine if the market is still a hot niche. The Google trend measures public opinion toward a particular topic or keyword and scales searches for the word in a range of 0 to 100. High ratings indicate that many people are getting involved with NFT collectibles and it indirectly signifies a good buy time. However, when the search for NFT-related keywords is low, it means you will need to tread carefully as fewer people are showing interest in the market.
3. Buy NFT Collectibles with Few Sellers
Many sellers for an NFT collectible always makes it difficult to sell the token unless you are willing to dispose of your holdings at a relatively low price. This could reduce your profit by a significant margin.
If you already own an NFT that has many sellers, examine other sellers’ price list to check recently completed sales. Also, check the space between the listed sale prices to see if the sellers aim to sell at any given price. If the prices are close together, it means that a lower price order may causes the asset’s value to crash even further.
4. Value Strategy
You should consider buying NFTs that are regarded as highly valuable. In order to compare different NFT projects based on how rare they are over others and to identify an NFT of value, you may need an online tool like Rarity.tool. Even though there are 10,000 CryptoPunks selling at high prices, the ones that have unique features compared to other punks are considered rarest. A rare NFT collectible gives a better chance of an increase in value as its demand would always outweigh its supply.
5. Buy the Ceiling
Ceiling NFTs are rare, expensive, and highly popular assets. If you have lots of cash to pay, these are the best investment choices for traders. These NFTs even may make huge prospects for growth if popular figures like celebrities or influencers get involved with them.
Relatively high prices with ceiling NFTs limits the trading for only a handful of people which could be a challenge. When their popularity diminishes, ceiling traders may record huge losses as they may opt to sell at giveaway prices.
Join chat groups on NFT discord servers, or even follow twitter accounts for NFT. Discords are populated with artists, collectors and investors who give their insights about upcoming mints and collections. In this particular chat groups, users learn about the latest news and tutorials while famous artists and investors make calls that have generally turned out correct. Discord members mostly have a share in NFT market and new comers may learn a lot from chatting with them. Some practical discord servers include NFTNEWSPRO, OpenSea, Rarible and Foundation.
7. Know best NFT platforms
There are multiple NFT trading platforms available online. Artists and investors should consider their preferences to find a suitable NFT platform for their art. Notice that each platform has its own advantages and limitations.
Some of the leading NFT platforms online include OpenSea, Foundation, Rarible, etc. go online and check for the best match for your art or purchase.
Virtual reality world, or Decentraland, provides a slightly more obscure way to trade NFTs. Decentraland is a digital platform that is similar to those seen in sci-fi films where the world is formed of parcels of land, each of which is an NFT that you can purchase, giving you ownership.
Parcels can be used to create anything you want, from a building to a game to an advertisement. These parcels can go up in price as the world gets more popular and land becomes more scarce or useful. Parcels can be sold on or rented out for other creators to place their content there, facilitating a range of NFT trading options. This virtual reality has been defined as the future of NFT market; therefore, for a good trading, both artists and investors should keep an eye on it.
9. Randomization of NFT
Randomization means that you have a chance of getting an incredibly rare NFT at the same price as a basic member of the collection. Generally, NFT minting events set one price for the entire collection. When it is minted, they reveal the artwork and in the case you “hit the jackpot”, you own an NFT which is worth at least 10 times. It may influence the entire NFT Investing game.
10. Buy multiple NFTs from the same NFT collection
On the other hand, some suggest buying 2 or more pieces of one collection to help with the psychology of selling. It is believed that if you own only 1 NFT in the collection, you are out of the club as soon as you sell your asset. The floor might rise too quickly for you to get back in and you may miss the share of benefit. Therefore, having multiple pieces from a collection makes it easier to sell at least 1 of your NFTs in that collection for a profit while you still have a share to enjoy from in future.
11. The market for the NFT
One of the most crucial aspects of trading NFTs is to consider the target market and its population. It is already known that the number of people in a community of an NFT project in Twitter or discord determines the market sale of a project; the larger the number, the better the market. Therefore, always avoid NFT projects with small community unless you have certain marketing plans. All projects are developed to satisfy concrete needs and require supportive communities to meet their goals.
While checking for the properties of an NFT project, spend some time to study about its communities. A large enough number of members in the community always attracts more buyers to invest in the NFTs and, therefore, helps to boost the selling price.
Also, projects with larger communities offer and keep more advantages roadmaps. They also provide better offers, such as NFT airdrops and giveaways, to attract more members and keep their communities encouraged.
Are These Enough for NFT Trading Strategies?
Well, the best ever advice to NFT traders could be a short sentence: Enter early to gain the better profit. If you wait until a project is on every social media platform, you may have to buy it at a relatively higher price. Be the early bird that catches the worm by recognizing new comers to the market and buy the tokens when too many people still don’t know about them.
What Should NFT Traders Do Then?
Traders had better make the time to check recent activities of the new artists or investors in the field. Let’s learn about some new comers to the realm of NFTs which after a short time changed to precious digital assets.
Bored Ape Yatch Club, as an example officially launched on April 30th costing almost 200 dollars (0.8 ETH). In the recent time, however, the cheapest Ape was sold for $100,000 dollars (almost 39 ETH) while the Bored Ape #8135 sold for $ 1.9 million (550 ETH), the highest benefit in today markets! So it seems that new art with strong original artist makes good benefit in a shorter time compared to traditional paintings.
Since October 15, there have been over 30 new NFT collectibles introduced. Check nftcalender.io for the prices and categories. Some just sold after few seconds for floor prices but made good profits for the owners only in 24 hours. Good examples are Mintable and Bullish Llama.
The next point to consider is to find a reliable art from a talented artist in form of NFTs. Besides checking NFT markets and news, one preferred way to learn about promising digital art is to look for exhibitions and art galleries whose artists aim to introduce their art in form of NFTs. Most NFT artists get better known after introducing their art to NFT market after their art exhibits. A good already known example is Beeple! Making photos of arts made during 5000 days, an NFT was created by the young artist Mike Winkelmann and sold for $69 million. Need more examples to trust new talented comers? Here is the next future hit:
A young but talented artist Sam Yari. Starting photography in 2013, he began his career in photography and fine art and soon got recognized as a talented artist. He continued with fashion photographer cooperating in several well-known projects by the Ministry of Culture and Tourism of Turkey, Metropolitan modeling agency, Bararossa Moratti Brand, etc. and was one of the first to present his art as NFTs. In an interview with touch magazine, his promising future in art was recognized. News is that he is going to hold an exhibition in a short time and since he has a share in NFT market, it seems that a unique but rare opportunity is opening to buyers and investors. If you are interested in this, check for news on NFT!
A Final Word
Here, we tried to present a better vision to trading strategies of NFTs and gave some advice for a better business act. To sum up, while choosing best NFTs to buy, consider the most important strategies to start your business: check the floor price, number of sellers, the ceiling and, the most important, the new artists who make the future. Stay with them to make better fortune!