In the past few years, we’ve seen enormous growth in the value of different cryptocurrencies like Bitcoin, Ethereum, and more. The side effect of this growth has been very interesting—the rise in demand for NFTs or non-fungible tokens in banking, education, medical, and other sectors.
NFTs are digital versions of real-world items like videos, art, in-game items, and music. When you purchase an NFT, you acquire the ownership and copyright information of that item, although this is not the case with every NFT. Also, it’s possible to purchase real-life collectibles in the form of NFTs, even though they are very few.
Generally, NFTs are traded online with cryptocurrencies, and they operate using the same cryptocurrency code. So, if you buy any NFT, it will be kept in a wallet, just like how you store Bitcoin and other cryptocurrencies. Now, the most interesting thing about NFTs is their uniqueness. Anything sold as an NFT comes with a unique signature. Thus, the owner retained the unique piece, regardless of the number of times the video or music is viewed or shared.
Now, this brings up one question—is NFT a good investment strategy? Below are the reasons why you should consider investing in NFTs or becoming a NFT developer.
Gives Investors More Liquidity
The main reason we should consider investing in NFTs is that, compared to other investment opportunities and traditional commodities, NFT gives investors more liquidity. This means you can get your money back faster than ever.
If you trade an NFT for another cryptocurrency, such as Ethereum, your transaction will be completed within minutes. The same applies if you want to exchange your NFT for cash—as long as there’s a buyer or seller out there who wants what you have to offer, the transaction will take place instantly.
Unique Asset Class
NFTs represent a unique asset class competing with other types of digital assets like cryptocurrencies and tokens; we should also mention everyone needs coins and tokens to invest and move around the blockchain. However, NFTs will bring something new because they are different from regular digital items like cryptocurrencies and tokens.
For example, while someone can copy your music or video file, non-fungible tokens are not duplicable. Also, if you try to give away your copy of a file or song you own, the recipient will still get the same thing as it has its unique properties tied to it.
Not Very Correlated With Other Traditional Assets
NFTs are not highly correlated with other types of investments—meaning their prices aren’t likely to rise or fall at the same times or in the same direction as other securities such as stocks and bonds.
For example, the price of an NFT tech can go down if the price of other cryptocurrencies or tokens drops at a high rate. However, as compared to stocks and other types of assets, the value of NFTs is not likely to change because they’re considered uncorrelated assets.
The Uniqueness Factor
Another reason you should consider investing in NFTs is that they are unique. There’s no sharing them like an Amazon Prime subscription account. You can own something that you can keep forever and enjoy all its benefits without having to share it with anyone else who might want to take advantage of what you paid for.
Also, because NFTs like art and music videos aren’t duplicable, their prices remain higher due to supply. However, the demand for these increases as more and more people want to protect and acquire digital property of their own.
Thus, if you’re looking for a new investment opportunity, consider NFTs because they offer wider options than cryptocurrencies and traditional assets. Also, NFT is very easy to trade online in the change of cryptocurrencies, such as Bitcoin. This means you can get your money back fast in case an NFT doesn’t prove to be worth its price, or you simply don’t like it after all.
Last but not least, invest in the uniqueness factor of this digital asset class—NFTs represent something we haven’t had before but still everyone needs: non-duplicable pieces of art and music that we can enjoy forever.
Growth and Development Potential
NFTs represent a pretty new type of digital asset and opportunity in the world of trading, investing, trading, and in other blockchain development companies; thus, there is still much room for growth and development when it comes to NFTs. This means that if you are looking to invest in something new but with potential, consider an NFT.
Now, because you understand that it’s worth it to invest in NFTs, you have the green light to invest in NFTs. However, you must note that NFTs are not publicly traded like cryptocurrencies. Rather, NFTs are diverse, with different value drivers, and are not commonly sold. This makes it hard for newbies to invest in NFTs. With that said, let’s look at a few things to note before investing in NFTs.
Copyright Issues
You might want to consider copyright, shipping, and authenticity issues before investing in NFTs. For example, you might not be aware that some NFTs represent an actual piece of art. This means if the original artist decides to sell their piece of art, there is little you can do about it because this type of NFT fluctuates on its own due to supply-and-demand forces.
Rarity factor
Also, some NFTs are more common than others because new forms are being developed all the time. What’s rare today might be more common tomorrow. Therefore, we recommend holding your investments for a long time and giving yourself room for mistakes and changes in the market.
Storage Factor
One of the main reasons people choose to invest in NFTs is their way of storing. Just like cryptocurrencies, NFTs are too, kept in a digital wallet in your phone or other devices. They do not take any physical space in the real world.
This advantage combined with its uniqueness makes it difficult to be stolen and misused, increasing the overall safety of your investment. However, because some NFTs are not safe (like original art pieces). We recommend you look into how their digital version was created before investing in them.
