Invest in NFT ; is it a profitable venture? Non-fungible tokens, more commonly known as NFTs, are unique digital assets. You can create and secure NFTS using blockchain technology, mostly Ethereum. NFTs may include digital assets such as avatars, collectibles, artwork, music, song, video, image, etc.
If you are a blockchain and NFTs aficionado and wish to be an early-adopter investor, this post is for you. You are not only going to learn about the six steps to invest in NFTs but also what to do once you have made the investment.
So, without further ado, let us dive right in.
6 Steps to Invest in NFTs
Whether you are a novice to NFTs or a seasonable cryptocurrency investor, here are six steps you must follow in order to invest in non-fungible tokens.
Step #1: Choosing Your NFTs
First and foremost, you have to shop for an NFT to own one. Decide the NFT you want to buy, and remember that each NFT is unique. However, you can also buy an NFT that is a part of a larger collection or series.
In order to choose the NFT, you wish to purchase, browse through the listings on NFT marketplaces. Continue your search until you come across the right NFT to invest in.
Some of the best marketplaces to initiate your NFT search are Axie, Rarible, and OpenSea. One of the primary factors is to determine the cost of NFT you can afford. Furthermore, you will need cryptocurrency to buy NFTs.
Step #2: Creating a Cryptocurrency Wallet
If you are a crypto-investor, you may already have a cryptocurrency wallet. However, if you are new, you will need to create one. In both scenarios, make sure that your crypto-wallet is compatible with the NFT marketplace. This means that the NFT marketplace accepts the cryptocurrency your wallet supports.
For instance, your NFT marketplace allows you to buy NFTs using Ethereum (ETH). In that case, you will need an Ethereum-based cryptocurrency wallet.
The best part is that you can conveniently create a crypto-wallet free of charge using your computer, laptop, or smartphone. Some of the best wallets to support NFTs sales and purchases are Coinbase Wallet, Ledger, and MetaMask.
Step #3: Topping Up Your Wallet with Crypto coins
Now that you have chosen the NFT you wish to invest in and created a cryptocurrency wallet; it is time to add funds to it. You can use traditional currency such as U.S. dollars to buy crypto coins required to buy your NFTs.
Typically, you will find most NFT marketplaces using Ether. However, some alternative blockchains use other cryptocurrencies to create affordable NFTs..
Step #4: Connecting Your Crypto-wallet with NFT Marketplace
Once you have added funds to your wallet, connect it to your desired NFT marketplace. Once done, you will be able to see your crypto coins balance available to purchase NFTs.
Step #5: It is time to Buy your First NFT
Choose an NFT and click on the buy button to make the purchase. Some NFTs may come at a fixed price, whereas others will be up for an auction. The highest bidder gets the ownership of the digital asset. Be quick in placing your bets as it is a cutthroat competition when it comes to certain unique NFTs or NFT series.
A quick reminder: When you buy Ethereum-based NFT, you will have to pay a gas fee for the transaction process to complete. This fee may vary from one marketplace to another. Therefore, do some research to ensure that you do not exceed your budget or end up paying more than you initially anticipated.
Step #6: Verifying Your NFT Transfer
Once you have purchased the NFT, you become an official owner with the right to sell, transfer, exchange, or trade the NFT at your own discretion. Once you receive the notification of the completion of the transaction, check if you can view your newly bought NFT in your cryptocurrency wallet.
Your blockchain network will verify and confirm that it supports your NFT. If successful, your NFT transfer to the cryptocurrency wallet will be complete.
What’s Next?
Now that you own NFT/s, you can sell and purchase NFTs to generate profits. You can even buy and hold NFTs for the long term, especially if these are collectible NFTs. This is a long-term strategy to hold the NFTs and sell them when the demand spikes the price in the marketplace.
As an NFT investor, your approach must be to reap maximum profits. Do not share your crypto-wallet information with any and keep it in a place that is only accessible to you and you alone.
As an NFT investor and owner, you will be solely responsible for recording and tracking your NFT capital gains. You may also have to report your profits on your annual tax returns. Speaking of taxation, NFT taxes can be complex.
This is because NFTs are mostly considered collectibles. Therefore, your NFTs maybe fall in the category of a higher tax rate of around 28%.
Investing in NFTs with Prolific Studio
If you have made up your mind to invest in NFTs, you have myriads of options. You can buy NFTs or mint your own NFT series. NFTs are creating a buzz in the digital and blockchain investment market. The industry pundits are already predicting NFTs to turn into a multi-billion-dollar industry by the end of 2030.
Investment in digital assets such as NFT is the future. The upcoming Metaverse will be all about buying, selling, and trading your NFTs. If you are interested in creating your NFTs, At Prolific Studio we are market leaders in minting 3D NFTs. We offer NFTs services in California, Florida, Colorado, Toronto, and other regions around the U.S., U.K, and Canada.
Speak to our expert 2D/3D NFT minting team to discuss your ideas.
