Non-Futurable Tokens (NFTs) are a set of unique digital assets that prove ownership of an item. NFTs are based on blockchain technology and can represent artwork, music, games and videos.
The NFT market is constantly growing, with new projects launching every day. Do you want to start investing in NFTs?
The NFT sector grew dramatically during the cryptocurrency bull market in 2021. Since then, the sales volume in the NFT market has amounted to millions of dollars. Investing in NFT has been lucrative for many investors. Projects such as BAYC, 5000 Days, and CryptoPunks have raised millions of dollars.
However, investing in NFT comes with a certain set of risks. This is due to the fact that most NFTs are not time-tested, and as we know, the crypto market is very volatile. Below, we will look at the main techniques to mitigate NFT investment risks:
Conduct thorough research
As with any investment, investors need to conduct a thorough due diligence on the project. Here are the main things to focus on: the project team, artist portfolio, previous sales and market trends. Also, pay attention to the overall direction and development plan of the particular NFT project.
Don’t invest in trends
NFTs come in many different types. Thus, investors have many options when creating profitable NFT investing strategies. NFT investments should focus on interests opposite to social media trends.
How to find worthy NFT projects?
NFTs are popular, with many new NFT projects popping up every week, if not every day. So how do you decide which NFTs are best to invest in?
Examine the following factors before investing in new NFT projects:
- The community behind the project, accounts on Discord, Twitter, Instagram or other platforms;
- “Roadmaps that outline the plans for the projects;
- Creators, which may include well-known artists, celebrities, or tech gurus;
- Availability on popular platforms, including Solanart or OpenSea;
- Unique features of specific NFTs;
- The amount of money you want to spend.
New NFT projects can include both physical and digital assets. For example, a collection may include physical copies of digital art or provide membership to the project’s private club, access to special features in game worlds, or invitations to digital or real-world events.
This point is important to consider when searching for the most beneficial NFT projects for you.
