To make money on NFT trading in 2022, you first need to know how to buy NFT tokens. Our Dfinity Community site has excellent resources for NFT beginners. Once you've set up your wallet on entrepot.app or another suitable marketplace, it's time to start NFT trading to maximize your profits!
Top 5 NFT Investment Strategy - 2022
If you haven't already started collecting and selling NFTs, then 2022 is an ideal time to begin. The next 12 months promise to be the year of the Internet Computer, and there are at least 6 reasons why NFTs will boom in 2022. So what are you waiting for? Don't miss out! Some of the best NFT opportunities are happening right now, like Poked bots, and people who buy NFT early will enjoy several advantages. The timeless adage that the early bird gets the worm is undoubtedly true regarding NFTs, so you definitely don't want to be late and possibly forfeit valuable profits.
Here are my top 5 NFT investment strategies to help you achieve success!
What Are The Top 5 NFT Investment Strategies?
- Prioritize Airdrops and Pre-sales - Airdrops and pre-sales are cheap, easy ways to get in on the floor price of exciting new NFT projects. Many would argue that projects like ICPunks, OG Medals, Motoko Day Drop, and BTC Flower are the best NFT investment at present. And guess what? Initial holders received these NFTs from free airdrops! How can you similar discover airdrop and pre-sale opportunities?
It's not too late! But it would be best if you got busy building connections with fellow cryptocurrency enthusiasts, staying informed, and contributing to the online Internet Computer community. Good things come to those who work! Sitting back, waiting, and hoping free stuff will fall into your lap isn't a winning strategy in the NFT marketplace. When it comes to the world of NFT trading, you need to actively pursue the next big thing!
That's exactly how I found out about Dfinity Community and started helping promising Internet Computer ecosystem projects in exchange for valuable NFT tokens. I was also able to get exclusive airdrops by creating an account on dscvr.one and staying active.
2. Think in Terms of Crypto, Not Fiat - Imagine two sellers of the same CryptoPunk NFT on Ethereum. The first seller parts with the NFT for $2,000 USD on December 14, 2018, to the second seller. The second seller then parts with the NFT for $75,000 USD on December 14, 2021.
Who got the better deal? The answer may surprise you! Assuming both sellers held on to their earnings in ETH, the first seller received 23.2 ETH, whereas the second seller received only 18.8 ETH. By December 14, 2021, the first seller's 23.2 ETH would be worth $92,800 USD.
That's $17,800 USD more than the second seller's ETH! While the second seller still turned a significant profit at $73,000 USD, the first seller actually made more money in the long run. Thus, it often pays to think in terms of underlying cryptocurrency value to maximize your profits.
It also helps to be patient and avoid making hasty decisions about buying or selling. So when you buy NFT, be careful not to get stuck thinking about present fiat currency values. After all, it's not today's USD price that matters most. Instead, it's tomorrow's cryptocurrency exchange rate that really counts!
3. Emphasize Intrinsic Value - Projects with utility or gameplay mechanics are often the best NFT investment long-term. Cronic Critters, for example, have breeding options, wearables, and other features somewhat reminiscent of the digital pets craze of the 1990s (remember Tamagotchi?).
Our Dfinity Community ICP Squad NFT rewards engagement with the Internet Computer ecosystem and features changing seasonal art, exhaustible wearables that give advantages for airdrops, and adaptive play-to-earn gameplay. But intrinsic value can also be passive. For example, Keegan's and Cole's IC Art collection features impressionistic works on canvas and empowers people who buy NFT to participate in curating and profiting from a growing online art gallery.
It can also be helpful to collect NFTs before games or utility features go live to take advantage of the hype that often accompanies new communities. Most NFT projects and associated communities will sadly fail, so you should focus on fundamental signs that an NFT community has what it takes to thrive. Also, don't be afraid to sell off NFT tokens from dying projects! It's survival of the fittest out there, and your ICP is better spent on projects with prospects!
4. Barter and Engage - Do you have Twitter? DSCVR? Facebook? Then get active on social media and engage potential buyers. People love hype and competition, so motivate people to buy NFT from you! Heck, start a bidding war! You can offer supplementary services, like shout-outs, video appearances, or article mentions to the winner.
This strategy has worked well for me. I recently sold my Motoko Day Drop NFT, which I got for free, for 75 ICP! Given current market trends, you can probably do much better than me! All you need to do is find and entice interested buyers. Many marketplaces for NFT trading, including entrepot.app, are set up to allow people who want to buy NFT to make offers.
Sellers can then select the best offer rather than selling NFT at flat prices. And don't worry if the next seller gets a better deal than you did on your old NFT! That will happen frequently. What matters most is that you consistently turn a profit. As long as you stay in the green and avoid the red, you're doing trading right! Sweetheart deals are nice, but they are not the norm. Be confident and keep pressing forward!
5. Heed Market Price - If you want to learn how to buy NFT tokens for the right price, you need to monitor market prices. Don't be the person who buys an NFT for 40 ICP and then immediately tries to resell it for 4,000 ICP. You'll almost certainly fail! Even if you succeed, you may establish a bad trading history that will grow resentment and alienate future potential buyers who follow your social media or projects.
The Internet Computer, and cryptocurrency exchanges in general, may be anonymous, but they are also very transparent. Always pay attention to what other people are paying, and always remember to look at your partners' trading histories to make sure you get a good deal when you buy. Don't get scalped! Business ethics are just as vital in the realm of NFT transactions as anywhere else.
I use Microsoft Excel to find the average price and standard deviation of similar recently sold NFTs. Asking someone to buy NFT priced within two standard deviations from the average is usually reasonable and fair. Beyond that, lower prices are often a steal, and higher prices are often a scam. So don't cheat yourself! And if you want to form good long-term trading relationships, definitely don't cheat other people!
How To Make Money On NFTs
In brief, the best way to make money on NFTs is to learn how to buy NFT tokens with intrinsic value early on or else acquire them from airdrops and pre-sales. Then, as market prices move, you'll be in a great position to sell your NFT tokens through bartering and engaging interested buyers. Maximizing your success will require patience and retraining yourself to think in terms of cryptocurrency instead of fiat currency values.
It's also worth noting that not all NFT projects operate by the same rules. For example, the base NFT avatar for Dfinity Community's ICP Squad game always costs a flat rate to mint. Thus, you likely won't be able to turn profits from trading avatars. Instead, the strategy here would be to equip accessories that optimize your chances of obtaining rare airdrops, which you will then want to sell at a profit.
As the NFT marketplace continues to expand and diversify, so will effective strategies for making money. NFTs are not a fad and will soon come to have practical applications beyond the collectible art world. Therefore, you will need to constantly adapt your approach and continually learn about new projects.
NFTs will reward investors who can:
- adapt to ever-changing rules;
- learn from their mistakes;
- focus on the future; and
- avoid resentment.
Also, it should go without saying, but anyone considering investing in NFTs must be able to have fun with NFTs. Most people find it easier to make a profit doing what they love, so make sure you actually want to enter the NFT marketplace! It takes a lot of time and effort to learn about NFT projects and build an NFT collection. If you're not having fun, the daily grind will eventually lead to burnout and increase your risk of making costly mistakes.
My parting advice? Enjoy yourself!
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- Disclaimer: The views and opinions expressed on this website are solely those of the original author and other contributors. These views and opinions do not necessarily represent those of the Dfinity Community staff and/or any/all contributors to this site.