As with investments of any kind, you need to make sure that you have a clear strategy if you are going to invest in NFTs. A strategy is often the difference between success and failure, and at the very least it can help to protect you against severe losses. But what kinds of NFT strategies should you employ?
In this blog post, we’ll look at a general overview of how to develop an NFT investment strategy. As long as you are considering all of the following, you should find that you are much more clued up on how best to invest in NFTs.
What Is An NFT?
First up, it might be helpful to briefly explain just what an NFT is, just in case you are completely new to the concept. A non-fungible token (NFT) is a kind of digital collector’s item that is stored on the blockchain. When you purchase an NFT, you are purchasing ownership of a digital item – be it a work of art, piece of music, logo or even a GIF.
Part of the fun of this is that you can then trade NFTs, or invest in them in a traditional way that you might with any other wanted item. And what we are going to look at now is how you can develop a strategy for doing that.
Learning To Evaluate NFT Collections
When you are looking at different NFT collections and trying to work out whether they are worth investing in or not, you have to effectively evaluate them in the right way, and this can be tricky to do at first. However, there are a few specific facets that you might want to focus on as you do this.
For instance:
- The size of their communities. You’ll be more likely to get good-value NFTs with the possibility of selling on if the Twitter, Reddit and Discord communities (to name but a few) are active and large.
- Trustworthiness of the team. As with any kind of investment, if you can trust the team behind the NFT in particular then you are going to feel a lot safer in your investment. In particular, look for teams that have a lot of professionalism and vision, as these are likely to carry.
- Style. Ultimately, you are probably going to want to invest in an NFT that you personally think has style, especially if you think other people will think so too.
Major NFT Investment Strategies
Now let’s look at some of the bigger and more relevant strategies that you might want to consider overall. All of these can be useful at different times, so they are worth knowing about from the start.
Buy The Floor
This strategy is for when you have a strong belief that an entire NFT collection is going to become more popular over time. In this case, you are going to buy the lowest-priced item in the collection at its Buy Now price. Because you are hoping the floor itself will increase (owing to the collection as a whole being popular) just having the lowest item is an easy way to get into it, and then profit in the long run.
Scrape The Ceiling
Alternatively, you might want to splash out on something that you think is likely to be popular – an individual NFT this time, not a collection. This might be an attractive and flashy work of art, for instance, that you think people will love. Scraping the ceiling means buying that high-value item in the hope that it will continue to rise in value thereafter. This is riskier, but potentially more rewarding.
Multiple Buys
Another strategy is to buy multiple NFTs from the same collection. With this strategy, you can sell one of your items and you are still going to be part of that collection, so you are essentially diversifying your portfolio here, which is something that you always need to do in investments of any kind.
NFT Marketing
Bear in mind that, however you hope to sell on your NFTs, you are going to need to have a decent NFT marketing strategy to do so. That’s where we come in at ReBlonde. With our help, you will have the assistance of blockchain experts who know exactly how to market your NFTs – making it that much more likely that you will be able to garner a lot of interest in your items and your collection as a whole. Contact us today to find out more about our NFT Marketing Services.
