Is NFT art a good investment? Understand why people buy digital art
Table of Contents
- What is crypto Art or NFT Art ?
- NFT art market capitalization
- Why would anyone buy an NFT?
- Is it possible to make money using NFT?
- Is NFT a wise investment?
In the past, only the elite and wealthy could invest in art. With the emerging market in NFT or crypto art, many companies, auction houses and artists are now investing in this new asset. Investors can expect to see significant returns on their investments in crypto-collectibles.
There are many pieces that will be auctioned at Sotheby’s and Christie’s. But there’s no reason to question whether NFT or cryptocurrency art is worth the investment. You need to be familiar with the details of how to purchase NFT or crypto art, as well as all terms and conditions. This is important for investment purposes.
NFT stands for non-fungible token. Each NFT is digitally signed, making it impossible to exchange it for another NFT. A clip of Lebron James’ highlights in the NBA Top Shot is different from Beeples Everydays The First 5000 Days because they are both NFTs. In this case, a NBA Top Shot clip may not be the same as another NBA Top Shot video.
The digital artwork Ocean Front by Beeple, which was sold for $6million, is different from Jack Dorsey, the Twitter CEO and cofounder. It is also not the same piece of work that was sold for $2.9 million. This is because each NFT is unique and has different values.
Celebrities such as Grimes and Lindsay Lohan are joining the NFT wave and releasing digital artworks, memories, and unique moments under NFTs.
NFTs can be compared to physical collector’s objects, except that instead of having a painting on the wall or any other historical item, the collector or buyer of art gets a digital file with financial or monetary value.
What is crypto Art or NFT Art ?
Decentralized Finance (DeFi), mimics financial products of banks, loans, and NFT art mimics art galleries, museums, and stores. Without costly and risky mediators.
Smart contracts (dApps) are a great way to do this. They were originally created in Ethereum. This type of programmable blockchain is capable of serving a variety of decentralized applications. NFT marketplaces, in other words are dApps that connect content creators and artists to buyers or collectors. This makes it easier for both sides to enter the market and eliminates the usual barriers.
NFT art market capitalization
Because of the structure of NFTs, it is difficult to estimate its current size. Each NFT piece is unique in its value and market. NonFungible.com reports that the global market in NFTs is worth more than $2 billion during August 2021. NFT art was valued at $650 million, which is according to an online database of collectibles and metaverses.
Why would anyone buy an NFT?
This is often the most common question about NFTs. Why would someone pay for content that can, in many cases be, downloaded? There’s a big difference between downloading NFT images and having them on your computer or mobile device. You don’t own the original NFT image.
The video or image you have downloaded is not a monetary or financial asset. However, the NFT supported image represents an artist’s original work. You can download the Mona Lisa image online, or buy a poster of it. However, copies and duplicates will not be as valuable as the original. Although you can download images thousands of times, they won’t be worth anything if you don’t have the NFT-linked version that certifies you own the original artwork.
For example, the WePlay Collectibles are designed for players who are interested in Esports and want to show their appreciation for talent and players in a different manner than merchandising. You can purchase items using NFT technology, both digitally and physically, through the WePlay Collectibles. These are items and rewards that can be used in conjunction with a tournament.
More information on the platform and NFTs can be found at anftraders.com
Is it possible to make money using NFT?
Yes. The unique opportunity for digital creators and artists to monetize digital products and creations using blockchain technology and non-fungible tokens is possible with NFTs.
NFT art is so amazing because an artist or content creator who creates artwork on the blockchain doesn’t need an art gallery or store. To make money, he doesn’t need an agent nor a lot of social media followers.
Another advantage is that artists can be compensated, typically between 5 and 10%, for work that is resold on secondary markets. Copyrights are also protected.
Finally, Ethereum, which is the second largest cryptocurrency, has a market capitalization of more than $420 billion. A digital artwork can be sold today for 1 Ethereum (which at the time of writing is approximately $3,500 USD). It will become more valuable over time if 1ETH appreciates to $10,000 USD. It is similar to buying shares. NFT art can be both a short-term and long-term investment.
Is NFT a wise investment?
Although NFTs are still largely cryptocurrency-based, there are plenty of examples where even a small investment can yield big returns.
Trevor Jones is an example of a traditional artist that has moved to crypto art. EthGirl was his first NFT piece. It depicted an animated collage of the Ethereum Logo that revealed a face. Initial sales of the NFT art were for 70 Ether (ETH), which was equivalent to $10,000. The artwork was worth more than $8 million two years later in 2021.
The same principles that determine the value of crypto art or NFT are used to determine its value as other assets. The old law of supply-demand.
Demand increases as the online community of buyers, investors and collectors grows. The supply of NFT art will increase as more artists realize that it is a better choice for their creations.
Rare pieces of popular art are more likely to be collected, appreciated or bought than those made by traditional artists. One-of-one works are more in demand than one of 100. These art pieces are more in demand than 1/1 works. Secondary and auction prices can rise significantly, depending on the collector demand.
Famous British artist Damien Hirst announced the launch of his NFT collection “The Currency” in mid-July. The public was offered 10,000 coins, which were intentionally shaped to resemble legal tender.
Because of its originality and generality, these coins require their holders to make a decision. They have the option to either keep the work in a physical form or store it as NFT on the Ethereum ledger. The other form can be destroyed if it is not chosen.
This project was a success: over 32,000 people have requested 67,000 NFT works, nearly seven times as many as the amount available. The sale of the NFT works should bring in $20 million at $2,000 per unit.
NFTs can be a great option for art collectors because they allow you to buy and invest simultaneously in new technologies and in art.
NFTs are believed to be as revolutionary as Bitcoin (BTC), and Ethereum (ETH), which will transform the financial system.
As with all investments, it is important to do your research on the NFT market. NFT markets and platforms are not all equally safe or reliable, such as those offered by OpenSea Foundation, Nifty Gateway, SuperRare and Foundation.
Potential investors will find a number of well-known, well-managed NFT trading platforms that are art-based and only available to NFT-only traders, such as SuperRare and Nifty Gateway. Transparency is another advantage of the NFT market. It is possible to view past transactions and trade data for individual pieces, artists, and even collectors.
How to buy NFTs?
You will need to purchase a few items if you are going to create your own crypto art collection. You’ll also need to purchase cryptocurrency, typically Ether (ETH) depending on the currency that the NFT marketplace accepts as payment. On crypto exchanges like Binance, Coinbase and Kraken, you can purchase cryptocurrencies with your debit or credit card. The cryptocurrency can be transferred to or exchanged to a crypto wallet.
When buying cryptocurrency, you should be aware of the fees. When you buy cryptocurrency, most platforms and exchanges will charge a minimum of 1%.
Popular NFT marketplaces
Now that you have set up your wallet and made Ether deposits into it, it’s time to connect it to an NFT marketplace. This will allow you to buy your first NFT. The following are the largest NFT marketplaces currently available:
OpenSea is the largest marketplace for digital assets and products. Log in to your Metamask wallet and browse the NFT collection to get started. To find new artists or assets, you can filter pieces by price and sales volume.
Rarible, similar to OpenSea is an open market that allows creators, investors, and collectors to buy, sell, or create NFTs. RARI token holders can also evaluate the features of fees and community rules by creating their own governance token.
At NFT, traders offer unique artworks that are not only digital. You will receive a unique piece created by one of the talented artists selected from hundreds of known artists.
NFT creators and artists must have “positive votes” to upload digital artwork to Foundation and sell NFTs. They can either be approved by Foundation or receive invitations from established artists to post their work.
It is a private community where NFT creators or artists pay “gas fees”, which means digital artworks can be extremely costly. Chris Torres, Nyan Cat creator, sold the animated GIF in NFT of the meme to the Foundation for $580,000.
This is because prices are higher on this platform – but it isn’t necessarily a bad thing. It is good for artists, NFT creators, collectors, investors, and anyone who seeks substantial profit. Assuming the demand for digital collectibles continues to rise or remains constant.
What is the best NFT to invest in?
It is up to you to decide whether or not you want to invest in non-fungible tokens. It is worth looking into NFT art, music and sports, as well as DeFi, crypto collectibles and gaming items.
However, you will need to ask all the questions as an investor or art buyer when buying NFT.
Remember that the intrinsic value for an NFT artifact is determined by what another person will pay for it. Demand drives the resale value of NFT artwork, not fundamental, technical, or economic indicators. These factors, along with the internal and external environment of a company, can influence stock prices. However, they also form the basis of potential investor demand.
However, you should approach crypto-collectibles the same way you would traditional investments: research the NFT market and understand the risks. If you feel the need to take a chance, do so with caution.
You shouldn’t invest in NFTs and crypto assets if you fear missing an opportunity, or because your neighbor is collecting CryptoPunks, Cryptokitties, or are investing. If you look at the following options, it makes sense to invest only in NFTs:
You are fully aware of the traditional art market
You’re already an art collector, whether you collect trading cards, sports stickers, art, or historical items.
While you don’t want to make quick cash, become rich overnight or build wealth in this emerging market, you do have an interest in making long-term investments.
NFTs, on the other hand are great investments if they represent the future of art ownership. NFT or crypto art is a better choice for those who have less capital to invest.
Since the invention of the internet, digital art ownership has been a revolutionary concept. NFTs are a way to make, store, buy and sell digital assets in a safe and secure manner. They also protect copyrights, allow for direct access to royalties and prove intellectual ownership.