There’s a recalibration in the blockchain space, and JPEGs are front-running the crypto show. Everywhere you look, it’s NFT this, NFT that. NFTs are here to stay. Finding the diamond in the rough is a skill you need to master if you want to diversify the right way.
- NFT are decoupling from the crypto market
- Community is the main driver for every NFT project
- NFTs that build for their community can stand the test of time
Non-fungible tokens (NFTs) are unique. They’re collector’s items, but not all get the recognition they deserve. And that’s because projects like Bored Ape Yacht Club or CryptoPunks have something TIME’s magazine NFT release doesn’t – community backing!
The NFT storm is here!
The discrepancy between NFTs and regular crypto is becoming more apparent. Search volumes for NFTs have flipped those of crypto for the first time as China, and various other Asian countries lead the charge. This could be due to China’s approach to legalizing NFTs. But that’s a story for another time!
Sales volumes don’t lie, and they’re aligning with the growing interest for NFTs. In the past 24 hours, NFTs have reached new records. Firstly, the OpenSea has done over $4.1 billion in January 2022, shattering August’s 2021 record.
Plus, OpenSea has had the second-highest daily volume it has ever recorded – $227 million in sales in just $24 hours. There’s a clear decoupling taking place between NFTs and crypto. NFT traders and flippers are becoming a thing, and we just saw why that’s happening.
What NFT traders wish you knew
Investing in NFTs is nothing like regular crypto. No matter how much you try, charting NFTs either tells you if demand increases or decreases. Blue-chip NFTs are the best indicator as to where the market is heading because they show demand from a NFT macro perspective. Why?
Bored Ape Yacht Club (BAYC), GutterCats, or CryptoPunks have become social status symbols. They and other blue-chip NFTs have something else in common, which is part of a bigger narrative that’s been driving NFTs and blockchain projects – the idea of community. They’re what keeping successful projects afloat. NFTs have never been about the artwork – at least collectibles. Instead they serve as a gateway into an exclusive community.
Community in the NFT space is not about just hyping a project for a rapid flip. Those who are in it for a fast cash-grab are often dismissed. Sure, you can find quick flips in almost every hyped NFT project if you get in at whitelist – and we covered those elements in our previous NFT piece. But that will never equate to what NFT stands for in reality.
NFTs are redefining what it means to be part of a social club and digital ownership allows them to do just that. NFTs are then an access avenue into a new form of collaboration where those that are part of the social club get the perks. It’s a 1 to 1 digital representation of real life, only with border possibilities. Why? Because you could belong to the same group as people that are above your social class – and this is priceless!
If you want to go fast go alone, but if you want to go far go together and that’s exactly what an interwoven NFT community is supposed to be. They’re helping each other reach similar goals and are even creating new opportunities for everyone involved.
The long-term game of finding NFT gems that turn into blue-chips, is by identifying communities that have as a basis a long term plan. Developers and NFT visionaries know how to develop and expand a loyal and enthusiastic community and this is key to the longer term success of successful NFT project!
Becoming an NFT hawk
The best projects that have “made it” are the ones that have been backed by the community. Success doesn’t happen overnight, and the same applies to NFTs. What goes up always must come down. If your goal is short-term flips, you can jump on the hype train, but the most meaningful profits are not made in a short period.
OpenSea, Ethereum Layer-1, and CryptoPunks are too expensive for everyday investors. Gas is expensive; prices are sky high, and failed transactions are common. If you only have $500 for an NFT, Ethereum is not the place to go.
Networks like Solana, Matic, or Cardano are viable alternatives because gas is much cheaper. Why pay $100-$120 and another $100 when listing when you can purchase NFTs at a discount and have a similar chance of generating an impressive ROI? Platforms like MagicEden on Solana or JPG on Cardano offer better alternatives. But what do you invest in?
There are unknowns in the NFT space, and it’s always tough to make the right call. There will be rug pulls – that is a certainty. The best way to approach NFT investing is by being early and scouring the Discord or Twitter community for clues about the team working on a utility.
What we mean is that developers have to offer investors something in return, either if it’s staking, airdrops, or a metaverse/game where NFT holders can utilize their NFT as an asset or gateway! For example, projects like Sappy Seals have built a Pixelverse that allows NFT holders to stake their NFTs and participate in the universe.
The NFT space is similar to the real world. There are millions of talented artists in the world, but what success boils down to is the ability to build a dedicated community. Unfortunately, only a handful of developers and artists have the experience at creating and rendering great digital art. At the end of the day, it’s a numbers game. There are too many empty promises in the NFT space not to do your research and pay extreme attention.
We recommend that you only start investing in NFTs if you are really plugged into the market. Scanning Discord and Twitter profiles is not enough because you are looking to validate your NFT investment choice. Picking the right NFT project is difficult. Only invest if you have spent enough time with the project to understand its motives. Most NFTs will end up being worth zero, picking that 1 in 1000 is tricky, and community investment by way of time and effort is a good sign of those that have a chance.