The hype around NFTs started a few years ago when Cryptokitties and Cryptopunks captured the hearts of many investors and enthusiasts. Now NFTs have become one of the most talked-about topics and the most sought investment on the internet today.
The value of an NFT is dependent on the demand or how badly the people want them. We’ve seen so many silly digital arts, jpegs, videos, and other digital assets being sold for an insane amount of money, and we’re talking hundreds of millions of dollars.
NFTs have a pretty wild market, and their prices can go up or down at any given moment. And because of its volatility, NFT trading started to get more popular as people could easily flip NFTs for quick profits.
Also see these related guides:
- How to Buy an NFT on Opensea
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- 5 Best NFT Marketplaces for Buying and Selling NFTs
What is NFT Trading?
NFT trading refers to buying and selling digital assets to make a profit. People buy NFTs like BAYC, Moonbird, Cryptopunks, and Axies which they then sell when their floor prices are higher.
But why would people sell their collections at low prices if their goal is to make money?
Well, for many reasons. People sell their NFT collections just because they need the money. While some people mainly sell when unfortunate news occurs, such as war, pandemics, and other events that could trigger a recession. During trying times, people tend to sell the riskiest assets they hold, such as cryptos and NFTs, because they fear that holding on to them would make them lose even more money.
There are even whales who make a living solely by trading NFTs. And in case you didn’t know, NFT or crypto whales are investors that hold a considerable percentage of the token or NFT project. And because of this, they can influence the market to the point where they can manipulate the prices whenever they make a move or dump their shares.
How Does NFT Trading Work?
Trading NFTs isn’t as complicated as you think, and practically anyone can do it. Here’s what you need to do to start your trading ventures:
Get yourself a crypto wallet
First, you’ll need to get yourself a crypto wallet where you’ll store the cryptos that you’ll use to purchase NFTs. Crypto wallets will also serve as the digital storage for the NFT you’ve purchased.
Go to any NFT marketplaces
The easiest way to get involved in NFT trading is to simply visit any NFT marketplaces like Looksrare, GameStop, Rarible, OpenSea, and Binance. You’ll need to find an NFT that you can purchase and flip. But of course, you can’t just unknowingly dive and purchase any NFT collection you see.
You’ll have to put more effort into it to figure out the main factors that make an NFT valuable and what affects its price. And it would be best if you look for NFT collections below their floor price and sell them when the price goes up.
Many people can successfully pull this off by looking for an NFT project that would bring value to the economy. For example, an NFT project that grants you access or membership to a private club where you can build strong connections and gain valuable insights and information.
Gain NFTs through blockchain play-to-earn games
Play-to-earn games are perhaps the most fun way to trade NFTs. And there are dozens of ways for you to approach this. You can play yourself, and mint NFTs or the plain old buy low and sell high to other players. And there are so many exceptional blockchain games out there that you can, like Axie Infinity, Decentraland, The Sandbox, and Gods Unchained, to name a few.
The NFT should also have a finite supply to ensure that its price would inevitably go up as more people join the crypto and blockchain space in the coming years.
Risks Involve with NFT Trading
You’ll need to find an excellent NFT project that would survive the market. And then buy when the price is low, and sell when the price is high. However, NFT trading should never be taken lightly, as simple as it sounds.
Trading NFT is one of the most, if not the riskiest, trades you can make. Because trading NFTs require rigorous research and analysis. And one must also understand how the market flows with all the overwhelming information that goes around the internet.
Please note that this article is not financial advice. The world of NFT is a wild space, and if you’re looking to start your trading quest, whether you want to do it for fun or if you’re looking to do it full-time. You should proceed with caution, and we highly advise that you seek guidance from a financial advisor.