NFTs are the future of digital art. They utilize the features of blockchain and retain the qualities of creativity. Our review of the NFT trade covers all you need to know.
NFTs have been very successful since 2021. Many people are now interested in NFTs. Some see NFTs as a way to collect digital works of art. For others, however, relying on the speculation specific to this market to trade NFTs is a matter of relying on the speculation particular to this market. So, What is NFT trading? How to trade NFTs?
Why trade NFTs?
As a reminder, NFTs are digital works that come in the form of an image, a video, a GIF, etc. Each NFT is associated with a token stored on a blockchain. This token guarantees the authenticity and uniqueness of the NFT in question. NFTs lend themselves very well to trading. For what?
Speculation about the work
Like any work of art, the value of an NFT can increase or decrease over time. The dynamics mainly respond to the law of supply and demand. For example, some NFTs capture a particular moment. Depending on the buzz created around this sequence, the price of the NFT can increase quickly. For example, this can be the case with NFTs in sports, such as the video of an important goal or a historic game event.
Some NFTs are part of a collection that has grown in popularity. When this happens, all the NFTs in this collection see their prices explode. For example, this is happening now with the famous Bored Apes collection.
More generally, the NFT market, being new, presents many opportunities. In 2021, the market saw its capitalization explode. If this has taken on the appearance of a speculative bubble, many investors have made money with their NFT.
The volatile price of cryptocurrencies
In addition to the image itself, we must remember that an NFT is, above all, a token (or token). This means that its price depends on the cost of the associated crypto. However, as we know, the cryptocurrency market is highly volatile. This, therefore, adds a second layer of speculation and makes the NFT market very conducive to trading.
As a reminder, the main NFTs are currently hosted on the Ethereum blockchain. However, in 2021, the crypto market has exploded. The price of the crypto ETH has increased and even reached its all-time high. Without doing anything, NFT holders saw their assets increase enormously in value.
How to trade NFTs?
There is nothing special about NFT trading. Like any trading, this activity involves buying and reselling the NFT to make a profit. Concretely, this means that you must first find an NFT marketplace. Then, once you have opened your account and connected your wallet, you will buy the NFT of your choice. You then become the owner of your NFT! The details of your transaction are stored on the blockchain.
Once you own an NFT, it is essential to monitor market prices. For this, it is necessary to spend time on different marketplaces. This will allow you to understand what types of NFTs are selling well. You will also get an idea of the market price dynamics.
The market is buoyant, and you are thinking of reselling your NFT to make money? In this case, you must put your NFT up for sale. You can use the same platform when purchasing or on another marketplace. In general, platforms offer you two solutions for selling your NFT. First, you can set a price and wait for a matching offer. Another often more used way is to sell your NFT at auction. Concretely, you can set a starting price and duration for the auctions. Then, you have to wait and take the best offer. When the market is buoyant, this type of sale can be exciting for NFT sellers.
The different types of NFTs for trading
As you will have understood, if you want to resell your NFT at a high price, one of the keys is to choose your NFT carefully at the start. So, even if market conditions are weak, you can always count on a quality NFT that buyers like. But what is an NFT? It’s a bit of everything! Discover the main types of NFTs on the market below. Make your choice!
Art is probably the thing that comes to mind first. NFTs are indeed seeking to establish themselves as a new art market. Unsurprisingly, it is in this area that you will find the largest selection of NFTs. Some artistic NFTs have reached sky-high prices. For example, NFT artist Beeple sold his work ” EVERYDAY’S: THE FIRST 5000 DAYS” for a whopping $69 million!
But art in the sense of NFT is broader than in the traditional field. For example, short videos or GIFs are other examples of artistic works available as NFTs. These videos are sometimes humorous and appeal to a specific audience. For example, the “Crossroad” GIF was sold for $6.6 million! As a reminder, this GIF represented Donald Trump naked, lying in the grass…
Who said NFTs have to be visual only? In fact, NFTs can also be music. Moreover, some artists make the right decision and use NFTs to promote their new album. For example, the NFT in question can be an extract of a song. This allows artists to strengthen contact with their fan base because they can sell their music (for singers) peer-to-peer. By avoiding going through an intermediary such as a music label, artists maintain control over the revenue from their album.
Object, avatar, or character from a video game
As explained in our article on play-to-earn and NFT games, NFTs are increasingly found in blockchain games. Depending on the principle of the game, the NFT can be a card, an avatar, a character, an object, land, etc. These NFTs can increase in value depending on the success of the game. In addition, if you progress strongly in the game, your NFT becomes even more valuable. This type of NFT, therefore, allows you to trade while having fun.
Currently, the best example in this area is the Axie Infinity gaming platform. In this game, you need to purchase a creature called “Axie” (in the form of an NFT) and then develop it. Your creature can also level up as you arrange fights with other Axies.
For metaverse platforms like Decentraland or The Sandbox, NFTs are not creatures. These are plots of land that players can purchase and then develop. Another critical example to know is also the Sorare platform. On Sorare, NFTs are cards bearing the likeness of football players. Imagine buying the card of a player who is still little known but who will become the new Mbappé…
Moments of sport or history
As mentioned above, NFTs can also be short videos depicting classic sports moments. This type of NFT is already very present in basketball and is increasingly developing in other sports.
Even more surprising, the NFT can also represent a defining moment in history. For example, the first tweet sent on Twitter was sold for several million dollars in NFTs. It was a tweet from Jack Dorsey, CEO of Twitter at the time. However, this NFT has lost a lot of value with the decline in the market in 2022. Put back on sale; its value would only be a few dozen euros by md-June 2022…
This type of NFT is exceptional. The price of the NFT meme is even more volatile than other NFTs. For what? A meme corresponds to an object or image created with the sole purpose of creating buzz. Therefore, the value of this type of NFT depends solely on the buzz generated on the web. This is why trading this type of NFT is particularly risky. Obviously, one buzz based on one meme can drive out another very quickly…
The Kabuso NFT is an example of an NFT meme. The Kabuso NFT depicts a Shiba Inu dog. It was sold in June 2021 for $4 million. A few months later, the NFT was split into 17 billion coins worth over $220 million! Of course, there are many other opposite examples as well!
This type of NFT is particular. However, you must know that buying a domain name in NFT is possible! As a reminder, a domain name corresponds to the email address of a website. “Larousse.fr,” “bbc.co.uk,” or “nbc.com” are some examples of domain names.
If you create your website, you must choose a domain name and pay fees to a host. However, if you purchase an NFT domain name, it is 100% yours for as long as you keep your NFT. So you won’t have to pay anything. Also, this is the only one who can use it.
A final type of NFT that is increasingly widespread concerns the field of fashion. More and more fashion designers are switching to NFTs. Therefore, you can choose to dress your avatar with one of their flagship (NFT) products!