Our guide is packed full of great tips for anyone who’s ever wanted to know how to make money with NFT. We’ll reveal what you need to do to pick an NFT that’s a decent investment and highlight some of those errors that are common among all newbies to buying NFTs. So whether you’re looking to invest in NFTs of basketball stars, digital cats or domain names, we’ll show you what you need to do to get a return from your investment!
What are NFTs?
You’re not going to make money with NFTs unless you know what these assets are, so let’s have NFT explained in simple terms. Simply put, an NFT is a non-fungible token that gives you ownership of a unique digital asset. The fact that it is non ‘fungible’ means that it is unique and there can only be one owner of the NFT.
NFTs can exist for anything in the digital realm. You could make an NFT of a selfie or you could buy an NFT of someone else’s artwork. Each NFT will be logged on a cryptocurrency blockchain such as Ethereum, and it’ll keep it there until you decide to sell the asset.
While NFTs have only been in existence for less than a decade, they are already transforming the way in which digital assets are bought, sold and traded online. As such, NFTs represent a fascinating investment opportunity for many people.
The theory behind making money from NFTs
Any NFT can be bought or sold. If you want to make money from the sale of your NFT, then its selling price will need to be higher than the price that you bought it for.
So what sets the price of an NFT? The actual NFT itself has no fixed value and its value is entirely demand-based. This means that a collectible from the CryptoKitties game might be worth thousands to one person, and yet be complete without value for someone else.
Take a look at any of our shortlist of top NFT tokens and you’ll see that they cover a variety of different sectors. But the one thing that all of these NFTs have in common is that they are in demand and it’s expected that their values will continue to rise. As such, many people will want to invest in these NFTs as they believe that they will be able to sell them for a higher price later on.
An example of how to make money with NFT
So let’s take a quick look at how you could in theory make money from NFTs. Here are the basic steps that you’d take:
- Get your wallet: You’ll need to download a crypto wallet which is where you store your digital funds.
- Buy your cryptocurrencies: Most NFTs exist on the Ethereum blockchain and so you’ll need to visit a crypto exchange and buy Ether coin.
- Go to a crypto marketplace: Here is where you’d browse all of the different NFTs for things like collectibles, trading cards, music, photography and so on.
- Make your purchase: Once you’ve connected your wallet with the NFT marketplace you can either purchase the NFT at a fixed price or put down a winning bid at an auction.
- Sell your NFT: After your NFT has grown in value according to demand, you can then go back to the NFT marketplace and sell the asset to make a profit.
The best NFTs to make money from
Go to any decent NFT marketplace and you’ll see that there are literally thousands of NFT assets to buy. Unfortunately, not all of these NFTs are going to rise in value. This means that you’ll have to do plenty of research and analysis into knowing which NFTs to invest in. Given the weirdness of many NFT collectibles, it can be almost impossible to know which assets are going to rise in value and which are going to remain obscure.
However, those licensed NFTs that are in some way affiliated with established public personas are likely to retain value over time. From pop stars like Grimes to sports icons like Tom Brady, there are plenty of celebrities who have released NFTs that are likely to become even more valuable in years to come. So while it could take some predictive skill to know which NFTs are going to be big news, a little common sense should help guide your investments.
Make money from NFT stocks
Not only can you make money with NFTs themselves, but you can also get a positive return from your investment in NFT stocks. These are those assets on the stock market that are in some way exposed to NFTs and cryptocurrencies.
Such stocks could include shares in a cryptocurrency exchange like Coinbase, or even shares in a company that hosts an NFT marketplace such as DraftKings or eBay. There are also NFT ETFs that gather together multiple investments in several NFT-exposed companies in one package.
The theory is that you buy stock in one of these companies in the hope that the share price will rise. You would then be able to sell the stock later on at a higher price and make a profit. Once again, such an approach requires a fair amount of skill and luck to anticipate how the market fluctuates. Plus it’s important to remember that any stock that is linked to cryptocurrencies is likely to experience much more volatility than other assets.
Create your own NFTs
Do you like drawing? You are an artist? Or do you simply like to get in the game and take on new challenges? So, our final tip for making money with NFTs is to create your own collection and sell it. If you want to deepen this topic we have prepared a guide on “How to make an NFT“.
Conclusion – Failsafe advice to make money with NFTs
Let’s face it, there’s no simple answer for anyone wondering how to make money with NFT. After all, your investments are at the mercy of the marketplace. This means that there’s just as much chance of losing your money as getting a return from your NFT investment.
However, if you’re willing to do plenty of research, invest shrewdly and get plenty of luck, then there is no reason why your NFT investment cannot pay off impressively. After all, there have been some truly spectacular sales of NFTs in the past few years. So while anyone can learn how to make NFTs, it can take a little more skill and luck to make money from these digital assets.