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Sirwin

NFT Investment Strategies To Maximize Profit

By Liquidifty.io | Liquidifty Blog | 13 Jun 2022


The current craze for NFT may continue for a few more years, or, conversely, stop by the end of this year.

But one way or another, NFT is still an underrated technology, if you think in terms of the long-term evolution of Web 3.0. Investors with a clear idea of how they invest are sure to make it through any crypto winter and get high returns.

Buying and selling NFTs is easy. But to make that trade profitable, you need to take some time and study the potential of future NFT projects. The more time you spend researching the project and the team behind it, the better your chances of finding a profitable NFT project. For those who want to study the essential steps of the project research, we've prepared this guide .

We've decided to share some of the most useful NFT trading strategies to help you improve your trading skills and make more money with NFTs.

Top 4 investment strategies

Whether you're looking for a short-term flip or a long-term NFT investment, you should plan your NFT purchases carefully.

1. Buy the floor

As the NFT market continues to gain momentum, there's a good chance that NFTs that appear now will have huge potential in the future. Thus it is essential to monitor the projects and try to find NFTs at the minimum price – floor price.

NFTs in the collection are connected to each other –  the price of each affects the calculation of the value of all NFTs in the collection. So if the collection is at the stage of its growth, it's profitable to buy NFTs from this collection with floor price, pull up the price to other NFTs and sell them with a profit.

“You purchase the cheapest NFT in the collection with the idea that the collection will become more popular. You sell the NFT again at floor, but the floor is now higher!”

You can sort NFT items from a particular collection by price to get the cheapest NFT for sale, and that will be the floor price. Then you have to become a part of the project community and follow all the recent news and updates as well as overall market trends – to find the best moment when you need to sell this NFT. 

Usually, the general recommendation is to sell such NFTs when the market is growing but hasn't reached the peak yet.

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However, not all cheap NFTs guarantee a high and fast ROI. This is why you should always choose an NFT project based on your interests and research. To ensure that you get the best price for an NFT collectible, it is best to keep an eye on the project when it has just launched. As NFTs are not just assets – it is an integral part of the project or collection – so they will develop and become more valuable as the project grows.  

This strategy is suitable for those who have already learned how to analyze projects and can recognize signs of possible fraud.

2. Buy high-demand NFTs

If you are willing to invest a lot of money in the NFT market, you should consider buying NFTs that are already popular and have weight in the community. 

It is a high risk and high reward game at the same time. If you are ready to invest money in rare and high-demand NFTs you need to choose the project carefully – as you can lose everything when the popularity of the project goes down. 

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However, you can find the point when the project is in full swing and all the NFT enthusiasts are hunting for these NFTs. In this case you can sell your NFT or you can become a collector with rare items that will raise your status and credibility in the NFT community. Cool collectors with excellent reputation are often followed and repeated, which makes it safer and more profitable to make purchases.

The disadvantage of this particular NFT trading strategy is that fewer people have enough money to buy NFTs. This makes it difficult to find someone willing to buy from you at a fair price. 

3. Buy NFTs from collections with many owners

Making a profit on any investment in an NFT implies that you will successfully sell that NFT at a higher price than the price you pay for it. Obviously, it will be more difficult to sell an NFT that does not have a large, supportive community ready to buy it.

Your NFT trading strategies should always depend on how many sellers there are for that NFT collection. If you want to sell, you need to have a high enough volume of trades to make a sale. The more sellers there are, the harder it is to keep prices competitive. That's because there are more people who will lower their prices more than you will.

“Having multiple pieces from a collection makes it easier to sell at least 1 of your NFTs in that collection for a profit”.

When you are looking for sellers for NFT, look at how they perform. If the listed prices have a big gap in between, it means the sellers had the patience to wait for the right buyer for them. They probably won't respond if you offer a lower price.

If there are many prices that are close to each other, it means that sellers are impatient and want to lower the price. Selling NFT is a battle for buyers' money. You will be more successful working with patient sellers.

Market trends and seller behavior will significantly affect the price. Note that this NFT trading strategy trend may change over time. This strategy is best used when comparing similar NFT collections.

4. Value-based strategy

The NFT value strategy focuses on buying valuable NFTs. It's worth noting that this may not be the best trading strategy for you if you're just starting or your budget is limited. 

If you want to stick to this strategy, pay attention to the reputation and brand development of the project, and cross-promotion with other non-crypto brands.

There are thousands of NFT-collections today but only a few of them have really become popular and valuable. For example, BAYC  (Bored  Apes Yacht Club) became one of the most successful projects thanks to their huge brand expansion and exposure.

The most expensive NFT from the collection was sold for a whopping $3.59million (769 ETH) thus far. Owners of the BAYC NFTs include celebrities such as Eminem, Jimmy Fallon, Stephen Curry, Snoop Dogg, KSI, Lil Baby, and Post Malone.

In 2021 Adidas announced a collaboration with Bored Ape Yacht Club as part of the new "Into the Metaverse”.

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The main reasons for BAYC's popularity are: interest from the celebrities, an active community, and, most importantly, the Social component. BAYC has greatly expanded the scope of NFT. It is not just a picture, but a pass to a closed community and a demonstration of social status.

Rare NFT collectibles have a better chance to increase in price over time because demand will always exceed supply.

Time to invest is now

There is no doubt that the NFT market will continue to grow in 2022. More projects are emerging, and they provide more opportunities than previous NFT projects. It's time to try new things. Start your investment journey with Liquidifty .

However, to truly understand current trends, you will have to participate in the NFT community. The community will answer exactly what it takes to increase the demand for a particular NFT. This is one of the basic steps you will need to take if you want to make profits using these NFT trading strategies.

There is no perfect NFT trading strategy that guarantees huge profits, but every investor should study and adopt a trading strategy that is suitable for the funds available. Also keep in mind that NFTs are highly influenced by market trends. Regardless of the NFT trading strategies you choose, you should always consider the current state of the market.

Stay tuned for the updates and more events by the Liquidifty team:

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Liquidifty.io
Liquidifty.io

Liquidifty — NFT marketplace on Binance Smart Chain with Initial NFT Offering platform and Launchpad for gaming projects.


Liquidifty Blog
Liquidifty Blog

Liquidifty — NFT marketplace on Binance Smart Chain with Initial NFT Offering platform and Launchpad for gaming projects.

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