Investing In Nfts: What Do You Need To Know?

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NFTs are fast becoming a popular investment option especially among young investors. NFTs have also caught the interest of celebrities. While most NFT buyers see themselves akin to art collectors and serious investors, skeptics are still seeing it as a passing fad. Either way, it’s hard to ignore NFTs in the market given their growth in recent times.
What is this new asset class?

NFTs are digital tokens that exist on a blockchain and represent ownership of unique digital assets. They are essentially non-fungible, i.e., one cannot be traded interchangeably with another. Like art, the rarity of an NFT is what allows for growth in value over time. Hence, if you purchase an NFT early, its availability is limited by ownership and the price could grow with time. What also adds to their value is the underlying blockchain technology. Once bought, the NFT will have an immutable, time-stamped digital record of ownership, which means nobody other than the owner can claim it as theirs.

Unlike stocks and bonds, it is not easy to figure out the intrinsic value of your NFT investment. The market value of an NFT is driven ...
... by what the buyers are willing to pay for it, much like art. In other words, the value of an NFT is dictated largely by its demand in the market. It also adds the element of uncertainty to the NFT’s value as demand is susceptible to fluctuations.
Where to buy it?

Notably, a user should trust and buy Bitcoin with a trustworthy crypto exchange like CrossTower. When we say trustworthy, we actually mean it. Globally ranked #4 crypto platform, CrossTower is one of the most dedicated crypto exchanges in the world where users can buy, sell and exchange a number of cryptocurrencies.
How can it benefit you?

Despite being different from most other assets, NFTs still follow the general investment principle for returns: buy low; sell high. The asset rarity and early ownership can ensure long- term returns. Moreover, market trends have been promising. The NFT market has been on a roll, experiencing phenomenal growth of over 900 per cent in trading volume from USD 300 million in July 2021 to USD 3 billion in August 2021.

A good investment is one that has significant long-term returns. Powered by blockchain technology, NFTs are already touted as the future of art and investment. But that’s not all. With decentralised features like smart contracts, NFTs can have a critical role to play in the coming decades, especially in the metaverse and virtual real estate.

One of the advantages of NFTs is the diversity that they can bring to an investor profile. Even within crypto, NFTs are seen as a different asset class.
What is required to invest in NFTs?

Investing in NFTs is somewhat similar to investing in cryptocurrency. You would require an Ethereum-compatible crypto wallet to hold and buy an NFT since most NFTs are built on the Ethereum blockchain. Such wallets are available as mobile/web applications and can be easily downloaded.

You might also need to buy some cryptocurrency first. While some platforms allow buyers to make an NFT purchase with their credit cards, many others don’t. In that case, you would require to have ETH (Ethereum) in your wallet to enable the purchase.

You would need to find a recognised and authentic NFT marketplace and follow the prescribed instructions to complete a purchase.
What should you consider when investing?

Making an investment, irrespective of the asset class, is a serious financial decision and should never be taken lightly. When investing in an NFT, one must be mindful of a few things. For more details click here www.crosstower.in/blogs/investing-in-Nfts:what-do-you-need-to-know