What makes a good NFT to buy?
The popularity of unique digital assets called non-fungible tokens (commonly known as an NFT) has increased massively over the past year, and that has made buying or investing in them all the more exciting.
Even with the current so-called Crypto winter, total NFT sales volume could top $90 billion by end-2022, according to Coindesk (after a record $40 billion in 2021).
How to spot good upcoming NFTs?
NFTs vary enormously in price. Some have sold for millions of dollars, while others go for a song. Once you decide to buy NFTs, how can you identify which ones are going to make money as opposed to the ones which are going to tank?
There are no hard and fast rule of course. Who would have thought that a bunch of ugly ape NFTs or some even uglier goblin NFTs would end up being sold for thousands or even millions of dollars?
What exactly is a non-fungible token? Check out our exclusive guide to NFTs.
With so many NFT projects cropping up every day, it is becoming increasingly different to pick that NFT collection which will be a winner.
We are here to help with some tips which can help you choose wisely.
Best NFT crypto to invest in
There are two types of buyers when it comes to NFTs: those who see them as art and those who see them as something that can make them earn money – investing in an NFT.
There are various ways to make money from buying an NFT. For example: flipping NFTs (buying low and selling high), investing short or long-term, staking your NFT for passive income or trading your NFT for another one.
Before you purchase an NFT, it is wise to decide which kind of buyer you are and choose accordingly.
Purchase or invest in NFTs that you like
Just like art, the type of NFTs you own depend very much on your personal preference. Apart from seeking the next upcoming NFT, you should also be asking yourself: “What do I like?” If you are into music, for example, there are plenty of music NFTs to choose from. Same with sports, such as Formula 1, for instance. And, if you are into digital arts or the art, film or the celebrity world is your thing, there are a plethora of well-established artists and stars who have dipped their toes into the NFT world, and lots of NFT art.
Find out who the creator is
Do some research about who the creator/s of the NFT project you are interested in is/are. Check out their social media, website and, when applicable, which previous projects they were involved in. As an aside, if they are anonymous, it does not necessarily mean that they are a scam (the Goblintown NFT creators were anonymous initially, before it was discovered that they were actually NFT creators Truth Labs). It does however mean, that it is easier for them to ‘sail into the sunset’ if anything goes wrong.
What does the market for the NFT look like?
Examine things such as trading volume, floor prices, market caps, number of holders, and so on.
Check out the roadmap… if there is one
Some projects (like Goblintown) purposely do not have a roadmap. Others (like Bored Ape Yacht Club) do. If there is a roadmap, give it a look to see if it is workable and if you like what you see.
What is the NFT community like?
A big part of NFTs is the community spirit they give rise to. Check out what the members say on social media, Discord and the like. If the members of the community are happy, it is likely to be a good project for you.
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