Looking to get into NFT stocks? You’re in the right place as we’ll explain to you NFTs in simple terms so that everyone can enjoy trading these digital assets. We’ll also identify some of the most popular stocks that are exposed to NFTs and highlight a few dangers of exploring this new territory. So join us as we see why NFT stocks are so popular right now.
What are NFTs?
Before we delve into NFT stocks, it’s worth having a think about the basics of NFTs. An NFT is a non-fungible token and if you have an NFT it gives you the fundamental ownership of a digital asset. Each NFT is completely unique and cannot be replicated so that if you have an NFT, no one else can have it.
Anyone can make an NFT and then sell that NFT to someone else. It could be a digital recording of a song you wrote, a piece of digital artwork, or even just a piece of computer code.
Even though anyone could copy or use the digital asset, you’ll retain ownership as the NFT will be recorded on a cryptocurrency blockchain – most likely Ethereum. Once you have the NFT, you can keep hold of it, or then sell it to someone else. Still confused? Then have NFT explained even further here.
What are NFT stocks?
NFTs themselves have no fixed value. Instead, they are assets whose value is entirely demand-based. This means that an NFT for a gaming avatar could be worthless or it could be worth thousands depending on whether anyone wanted it.
As such, an NFT’s value can rise and fall like any regular stock. This has meant that NFTs have quickly become speculative assets that people will buy and trade. So rather than buying or selling standard stocks in companies like Apple or Amazon, you would buy an NFT in the hope that it’s value will rise and you could then sell the NFT for a profit later on.
As well as the actual NFTs, you will also see specific stocks listed at crypto brokers as being particularly exposed to NFTs and cryptocurrencies. Some of these might be stocks in popular cryptocurrency exchanges, or they might be special ETFs (exchange-traded funds) that feature a variety of different assets that are all in some way linked to NFTs.
What are the best NFT stocks?
By definition, the best NFT stocks will be those assets that are due to rise in value so that your investment will have a positive return. This requires a fair amount of predictive power, and obviously, no one is going to know which way the market will turn. However, here are a few examples of NFT stocks that have performed well in recent times.
- Coinbase (NASDAQ:COIN): As one of the world’s leading cryptocurrency exchanges, Coinbase is a great example of an NFT stock. After all, Coinbase lets millions of people buy cryptocurrencies with regular money that they then can use to trade NFTs.
- DraftKings (NASDAQ:DKNG): This might be known as being a fantasy sports platform, but DraftKings has recently taken the surprising step of hosting an NFT marketplace on its web platform. The DraftKings NFT marketplace operates on the Ethereum blockchain and it is primarily related to sports collectibles.
- eBay (NASDAQ:EBAY): It’s not surprising that one of the world’s leading auction sites would eventually turn to NFTs. While eBay has yet to open up to cryptocurrencies, the fact that it is starting to list NFTs for sale is a hugely positive step.
Dangers of trading NFT stocks
It’s important to note that it can be very easy to lose money with NFT stocks. After all, NFTs are equally able to fall in value just as they can rise. While we have a guide that tells you how to make money with NFT, it’s always best to be on the safe side. Plus it’s worth noting that cryptocurrencies are hugely volatile and many people have had their crypto investments wiped out overnight.
You should also consider which NFT marketplace offers you the most secure and trustworthy way in which to trade and manage your digital assets. Finally, we’d recommend using a secure crypto wallet with two factor authentication to store your funds securely.
Conclusion – Your best guide for NFT stocks
By now you’ll realise that NFT trading has the potential to generate some spectacular returns, yet also some massive risks too. The good news is that NFT stocks are easy to get involved with and they can be a positive way in which to build up a balanced investment portfolio. Just remember that anything linked with cryptocurrencies is likely to be volatile and as such, you should only invest money that you don’t mind losing.