NFTs have really come into their own in the last year, and you have probably seen news reports of various NFTs selling for hundreds of thousands of dollars, making people rich overnight. But not every NFT sells for such large amounts of money, and not everyone who buys or mints NFTs sees that kind of profit, so if you are thinking of NFT investments, what you need help with is how to know if an NFT is valuable?
Read also: Can you sell an NFT on multiple platforms?
What gives NFT Value?
As NFTs are still a relatively new type of asset, there are still anomalies in perceived value that can take you by surprise, leaving you wondering how to know which NFT to buy. However, there are some things that you can look at to understand whether the NFT is likely to increase in value, these are:
1. Rarity
Is it an NFT with a special, unrepeatable back story? If it is the first NFT art from a well-known artist or creator, something built by a celebrity or similar, then that NFT will be a rare, unrepeatable asset that will have increased value. If you are buying NFT collectibles, you can check the rarity of your NFT on https://rarity.tools/ for Etherium projects and https://howrare.is for Solana projects.
This is because buyers will be drawn to the NFTs with something extra, whether that is coming from an artist they love or a celebrity who they admire. The nature of NFTs, with the blockchain acting as permanent proof of the uniqueness of that specific asset, ensures that these types of NFT have additional value beyond the piece itself.
2. Utility
The other sign that an NFT can have additional value and be sought after in the market is utility. While many NFTs are digital artwork, some are useful in games, metaverse, others have real world applications. Those created for games tend to have unique effects in the game, such as a spell, or a new character, and as a result, the value of that NFT will rise over time due to desirability.
Real world application add value too, and the best example is perhaps the NFT tickets issued for the Euro 2020 soccer tournament. These NFTs were real, functional tickets, and as a result had additional value, as most games were long sold out. As the final approached, the NFTs grew significantly in value as one of the last options for getting into the stadium.
In addition to these factors, an NFT’s value will also depend on how you promote it after minting. A good promotion idea can make an NFT feel like it is more important and therefore more valuable.
How to promote NFT?
You have two basic options when promoting an NFT, paid and free. By posting regular updates on your social media channels, you can raise awareness and interest in your NFT launch, and that can go a long way to increasing value by encouraging a high volume of bids. It is a similar story with Upcoming NFT Calendar, a useful tool that shows where and when NFT drops are happening, something many in the industry use today. Other free options include getting friends in the NFT space to promote for you, often part of an agreement to do similar for them, and also take your project to the relevant Reddit communities and Bitcointalk pages to gain interest.
You can also pay for promotion too, whether that be as a featured drop on your chosen marketplace, pay for promotion on NFT themed social media accounts and industry newsletters, or pay for a Crypto influencer to promote your NFT drop to their audience. If you want to promote your NFTs feel free to contact us.
How to know which NFT to buy?
Putting all this together can help you understand which NFTs are likely to have added value both at launch and over time. When you need to know which NFT to buy, look at the rarity and utility, and you will be able to see new projects that are likely to increase in value.
So, an NFT project that involves a well-known artist, or is connected to a celebrity or popular influencer are good examples of NFTs that are going to be valuable. As with anything, if a celebrity is endorsing, or involved with a project, people see it as more important, especially if they have a long-term plan for the NFT project or follow-up ideas.
It’s the same with drink producers and a range of other things, for instance Dwayne Johnson’s Tequila company, and works with NFTs too. If they are also connected to a real-world object with additional functionality, that is an even bigger indication that the project will deliver additional value.
So, a celebrity-backed NFT project that connects to a real-world project such as creating NFTs of a character or movie scene, would be the perfect opportunity for a valuable NFT.
What can you grow in an NFT system?
Through NFTs you can grow your cryptocurrency holdings, and as a result, your own wealth. Whether you hold NFTs themselves as assets increasing in value, or you trade NFTs and increase your cryptocurrency assets, you are growing your own net worth through the NFT system.
Can NFT be exchanged for money?
You usually can’t make a direct exchange an NFT for money, but you can get cash for your NFTs after a few simple steps. NFT marketplaces usually take funds in cryptocurrency, based on the particular blockchain the marketplace used. The most common in the NFT world is Ethereum, but others are used as well.
So, while you can’t sell NFTs directly for cash, you can sell them for cryptocurrencies like Ethereum, and then sell your cryptocurrency for cash. Its an extra step dure to how NFTs are transferred between people, but you can make money from an NFT.
Read also: How to Flip NFTs for Profit
Conclusion
The NFT system offers a new kind of opportunity for anyone, whether an investor looking for new markets or someone who likes the technology of cryptocurrencies and NFTs. However, finding the right NFT asset that will increase in value and grow your wealth can be a challenge. Understanding how to know if an NFT is valuable is a key skill that will help you spot the best opportunities in the NFT space, and with it gain success as an investor.