ARE YOU INTERESTED IN NFT STOCKS?
Interest in NFTs as an investment has reached a fever pitch, so, understandably, you may be asking yourself, “What are NFT stocks I can invest right now?” or “Are NFTs the right investment for me?“. As with any investment, understanding what you are investing in is an excellent way to ensure it suits your investment style and comes with an acceptable risk.
What are NFTs?
We already covered the meaning of NFT- or Non-Fungible Token. As a recap, you can replace something with something of equal value when it is fungible. A $10 note is fungible because you can easily swap it out for five $2 notes or two $5 notes. Something that is not so easily replaced or divisible, like a work of art or an antique vase, is considered non-fungible.
NFTs provides a method for creating unique digital properties that you could otherwise easily duplicate.
The NFT marketplace is supported by blockchain technology similar to cryptocurrencies like Bitcoin and Ethereum. Tokens on a blockchain hold information about a piece of art, indicating that it is not a copy but the original piece.
Digital artists and musicians have embraced NFTs as a way to sell their unique pieces as original creations. The holder of an NFT is assured that they hold the original, and everything else is a copy.
If you compare an NFT to a real-world piece, owning an NFT could be comparable to owning an original van Gogh with a certificate of authenticity versus owning a print.
Anybody can make an exact copy of an art piece, but there’s only one original.
The only person with an original digital art creation is the one holding the NFT.
How to Invest in NFTs
NFTs are brand new, so trading in them usually means you have to deal directly with the owner of an NFT via an NFT marketplace.
NFT marketplaces are popping up online everywhere, and most are catering to a specific audience such as gaming, sports, or art.
There are no NFT stocks you can buy, but more companies are creating their own marketplaces to cater to the NFT trade. NFT Plazas provides a regularly updated list of NFT marketplaces.
Online art companies, such as Takung Art (TKAT) and Oriental Culture Holding (OCG), are entering the NFT market.
Are NFTs The Right Investment Vehicle for You?
Due to NFTs being relatively new, there is still a lot to learn about using them as an investment.
When you invest in an NFT, you plan to resell your purchase for a higher price. It’s not easy to accurately gauge the value of an NFT stock. How much you make will depend on how much someone is willing to pay.
You may buy Jack Dorsey’s first-ever tweet for $2.5 million, but there is no guarantee you will make your money back and more when you decide to sell it.
If you are keen to get into NFT investments, understand that the market is highly speculative.
Set limits on your spending, and don’t expect to get rich overnight.
Keep the bulk of your portfolio in index funds, ETFs, or the stock market. This will give you a safety net against risky investments like NFTs.
Be realistic about the risk. There’s no doubt that NFTs deliver an exciting avenue to explore for investors who like to make things more interesting.
It could be fun to speculate, but if risking isn’t your thing, it might be a good idea to watch on the sidelines while you give the NFT market time to mature.
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