The crypto NFT space went a buzz with the sale of “Beeple Everyday: The First 5000 Days” NFT at $69.3 million. This sent the world into a frenzy with a huge population looking into and investing in NFTs. As crypto adoption exploded in 2021, so did the attraction toward and demand for NFTs.
Looking at the 2022 crypto crash; the NFT market wasn’t an exception. OpenSea, one of the biggest NFT marketplaces, experienced a 75% reduction in trade volume between May and June alone. The prices of the most valued NFTs dropped as well. Despite the low volumes and drop in prices, crypto NFT still enjoys massive visibility.
In early 2022, Twitter announced its new feature that enables users to use their NFTs as profile pictures. Following this announcement, Meta introduced the same concept for Facebook and Instagram. There has been a dramatic increase in the number of people using NFT profile pictures. Especially on Twitter.
Celebrities continued participation in the crypto NFT space makes it even more significant. Recently, Snoop Dogg collaborated with Mobland in creating NFTs for a digital weed farm. A project which will be part of NFT 3.0. Does this mean NFTs are still a great investment?
Vignesh Sundaresan, the person who bought “Beeple Everyday: The First 5000 Days”, still believes in NFTs as a significant store of value that represents a revolution in how art is viewed. In a CNBC interview, Sundaresan pointed out that NFTs may become a commodity class that will connect traders globally.
Is Crypto NFT still worth it?
Experts remain split on whether crypto NFT is a great investment space. While others are calling it a ‘bubble’, others expect NFTs to gain more mainstream adoption. Financial experts advise that only 5% of investment should be allocated to cryptocurrency, including NFTs. Also, thorough research and keeping up-to-date with crypto news is advisable; Algory Crypto News offers the best space for updated crypto news which you can filter easily. Amazingly, you can have updates on your phone through Algory’s Crypto News Aggregator Mobile App.
However, using different strategies, you can still make some profits in the crypto NFT space. Let’s get into the details:
NFTs can’t be replaced or duplicated. However, they can be leased. In real estate, a property owner leases it out to another person who pays a certain amount as rent at an agreed-upon interval. Similarly, an NFT owner can rent it out and receive payment of an agreed amount for a particular period. The process involves the lender and the borrower reaching an agreement.
This is the most popular way of making profits from NFTs. A crypto trader buys an NFT at a low price and waits for its value to appreciate then sells it at a profit. Even though a lot of traders have benefitted from NFT trading, it’s still considered quite risky. The value of an NFT appreciates according to the importance people attach to it. Therefore, an NFT can easily lose value as well, resulting in losses for a trader.
However, if it appreciates in value, the trader can make massive profits. The concept looks simple but a trader needs to do thorough research to identify undervalued NFT projects that have the potential to explode and determine when to buy, wait or sell.
Staking is a popular concept in DeFi and crypto NFT space; NFTs can be staked to receive rewards. The newly developed structures integrating NFTs and DeFi, enable crypto investors to earn from staking NFT. Currently, several NFT projects have staking platforms which investors can benefit from.
Some projects allow for the staking of any NFTs while others allow for the staking of the native NFTs only. In most projects, the rewards are paid in governance tokens that allow holders the right to vote on decisions that concern the future of the NFT project.
Invest in Play-to-Earn NFT Projects & Games
Going through the Algory Crypto News scanner, a lot of Play-to-Earn (P2E) NFT projects are being introduced in the crypto NFT space. Several exciting NFT projects are combing NFT ownership, meme coins, and P2E gaming. The P2E NFT Games market was estimated to be worth $776.9 million in 2021, a value that’s expected to grow to $211.72 billion by 2030. This seems to be a great place to consider investing in as a trader who also enjoys gaming.
In NFT games, the game settings, assets and rewards can all be tokenized into NFTs. Unlike traditional gaming, NFT gaming enables users to have true ownership of assets and rewards won during a game. These assets can be rented to other players who want to level up. Each time the asset is re-sold, the player gets royalties. Through these two concepts, the players earn passive income.
Will NFTs go up in value?
As with most financial instruments, the future of NFTs isn’t certain. However, NFTs still holds a huge potential for continued growth in the blockchain technology space. NFT is already massively associated with the future of the internet; web 3.0 and the metaverse.
Currently, NFTs are being integrated into ownership of intellectual property including art, and music. This is a game-changer for content creators. By using NFTs for digital ownership, artists can gain deserved compensation and recognition by eliminating several middlemen.
Will NFT increase in value? There’s no certain conclusion to this question. However, more wealthy investors are boarding the NFT train and more of the globally recognized brands such as Coca-Cola are embracing NFTs as part of marketing. This shows there’s still hope for the growth of the NFT industry.
It’s speculated that NFTs may form a significant part of the nextgen internet. Despite the hype around NFTs in 2021, currently, a huge emphasis is placed on NFT utility and usefulness in the long run. However, the NFT market is still in its early stages as a part of revolutionizing digital asset ownership. There may still be hope for a bounce back after the bear market experienced in 2022.
Also, read Crypto Market Tips
The above article is entirely the author’s opinion and is not in any way financial advice. Always carry out thorough research before investing and only invest what you can afford to lose.
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