If you don't have a strategy, you cannot successfully invest in or trade any asset – stocks, bonds, crypto, etc. The same rule applies to NFTs.
With the boom in the NFT market last year, we have witnessed more investors allocating capital toward NFTs. And with that, numerous NFT investment and trading strategies emerged that anyone could adopt for their portfolios of JPEGs and digital collectibles.
Read on to learn about what to look for when investing in NFTs and discover a list of popular NFT trading strategies.
While buying and selling NFTs is a simple process, the case isn’t the same if you want to make a profit when trading your NFTs. It’s important that investors invest their time in researching future NFT projects before investing.
For instance, if an NFT is trending on Twitter, that’s not the best time to invest in it. Why? Because as soon as it starts trending, it means the prices have already gone up.
However, if you spend more time researching future NFT projects, you are more likely to find a good NFT project that you can invest in.
So, what exactly should you look at when investing in NFTs?
Considering an NFT’s market capitalization is a good starting point as it will show you how liquid an NFT is.
NFT market cap is determined by multiplying the total number of holders by the average price of a single NFT from a given collection. That way, you can gauge an NFT collection’s current value and see how likely you will be able to sell your NFT again once you want to exit your position.
Today, there are a plethora of NFT tools that can provide investors with the right data to help them make the right decision.
More and more NFT collections offer some type of utility. The utility can come in the form of token and NFT
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