How to Invest in NFTs

How to Invest in NFTs

If you have been following our blog, you might have read our guide on how to buy and sell NFTs. Although that guide is complete in its own right, we wanted to do one more for those of you who are really interested in non-fungible tokens and want to learn how to invest in NFTs. As you might already know, we have our own collections of NFTs. But these blogs are not just to promote them, we are 4rtian Pride, and we have a combined experience of 120+ years in digital and physical art. And we care more about art than our profits. Keeping that in mind, we have started writing these guides to teach you how to invest in NFTs so that you will be able to make informed investments. 

But, Should You Really Invest in NFTs?

As noted, our purpose is to educate you about everything about NFTs, crypto, tokens, and the metaverse. Keeping that principle in mind, it would be better to discuss if you should dabble in this realm before actually telling you how to invest in NFTs. 

From a pure digital creator’s perspective, there could not have been a better technology than an NFT. It is not just art; literally, anything can be sold as an NFT. On the other hand, it can be tricky from the buyer’s perspective. If you are a beginner, it would be better to look at our basic guides first. If you have already read them, the only thing you need to know is that digital assets are here to stay. Even if some people call it a bubble, it is here to stay and make its mark in the technology revolution that is going on these days. The rise of NFT collectibles, crypto, and digital tokens will be shaping the future. 

How to Invest in NFTs

The NFT market is booming right now, and there are multiple investing opportunities. Before moving on, you should that an NFT is a digital asset or work, and its price keeps changing concerning real money. Therefore, the best time to get into this market is when you have enough information.

NFT graphs

Step 1: Choose an NFT

As evident, the first step to investing in NFTs is to find an NFT collectible that you want to buy. The first thing you should determine is whether the NFT will give you profit if you choose to sell it. For this purpose, you should look for certain aspects. For instance, if the NFTs are listed on-chain or off-chain. On-chain means the NFTs use blockchain technology, while off-chain means the assets are held in a centralized server and can be altered. You should never go for off-chain.

Before investing in an NFT, you should check out our guide on different types of NFTs. It will give you an idea about the various collectibles you can choose from. For instance, NFT can not only be digital art, but any digital asset such as video, sports moments, or any other work of artists, can be sold as NFTs.

Other than that, keep an eye out on upcoming NFTs. The best way is to join their Discord communities to check what others say about that digital art collection. 

Step 2: Fund Your Crypto Wallet

The second step of learning how to invest in NFTs is to understand the blockchain and crypto requirements of the NFTs and then fund your crypto wallet accordingly. For instance, most NFTs, including ours, are sold on the Ethereum blockchain. Therefore, you would first need to make an account on a crypto brokerage or exchange. You can think of them as intermediaries who let you buy or sell cryptocurrencies. Most notable of these brokerages or exchanges include Binance, Robinhood, Coinbase, Gemini, Kraken, etc. 

The primary difference between a brokerage and a firm is that you deal with intermediaries in brokerages but, you can deal with actual buyers and sellers on exchanges operating on current market trends. Moreover, keep in mind that these firms charge a fee for each transaction. It can either be per transaction or on the total volume of transactions in a particular period. It can also depend on the traffic on the token and blockchain you are using.  

After making the account, you have to use real money to get the cryptocurrencies, such as Eth and Bitcoin. The price of cryptocurrencies keeps fluctuating with time; therefore, the real money price of the digital asset might vary when you want to buy it.

NFT with bitcoin

Step 3: Find the NFT Marketplace

The last step in learning how to invest in NFTs is to find out the marketplace where you will sell your NFT collectible. For example, you can find our NFTs on OpenSea. The beauty of these marketplaces is that they use two different methods; they either sell the NFTs for a fixed price or auction them. In auctioning, every user on the marketplace can bid their price; if you are particularly interested in an NFT, you can outbid to buy it.

Apart from OpenSea, the other popular marketplaces include Rarible, Larva Labs/CryptoPunks, Nifty Gateway, etc. When you buy an NFT, you can view it in your wallet. However, unlike physical purchases, non-fungible tokens are digital assets and can only be viewed digitally. These marketplaces have different sections, such as a Top Items category, which makes it easy to look for NFTs.

Most artists and creators are currently using Eth to sell their collectibles. It means that the users need to have that suitable crypto in their wallet. However, some sites allow other cryptocurrencies as well such as Bitcoin.

Step 4: Make a Profit on Your Investment

If you are solely collecting NFTs, this step is not for you. If you just wanted the ownership of a unique asset, you have successfully achieved that. But if you want to make a sales profit, you should know how to sell your NFTs. We have covered this in detail in our guide on How to Buy and Sell NFTs, but to give you an overview, you can enable a royalty feature of your NFTs. And it means exactly what it sounds – you will get a portion of profit in crypto tokens whenever your sold NFT is resold. 

how to invest in nfts

Be ready for the gas fees

One of the most bothering headaches in the cryptocurrency world is the extra gas fees that you pay in addition to the original price. Gas fees are the price you pay to the miners who make the cryptocurrency transactions possible.

The amount of gas fees depends on one major factor i.e., traffic. The working model of this is the basic supply and demand mechanism. The more traffic on the cryptocurrency blockchain, the higher the gas fees will be. 

One of the most used blockchains is the Ethereum (Eth) blockchain. For this same fact, the fees can be higher when compared to other crypto blockchains. Ethereum might be costly, but the advantage of using it is that most creators and artists host their top collectibles on this blockchain.

Most people forget about this before getting the ownership. Whenever you are going to mint or enter an auction for the NFT artwork, always keep some extra cryptocurrency tokens. With this precaution, you will not face any problem when buying your favorite digital artwork as a non-Fungible token. 

Final Words on How to Invest in NFTs

That is it for our guide on how to invest in NFTs. However, here is one more pointer that you should keep in mind. When you buy a non-fungible token, it is not only the NFT you are buying, it is also the artist and the team behind the NFT who is driving the price of the NFT. In other words, you are not only investing in the artist’s work, but you are also making an investment in the artist. We do not want to brag, but as we mentioned above, we have a combined experience of 120+ years, and it is things like these that count in the valuation of collections. Nonetheless, we hope you best in your investment ventures and keep reading our blog if you want further guidance.

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