Why people are investing in NFTs 2023
Many people believe that investing in it will maintain its value in the future, and accept it as it is considered a safe investment. Some invest in NFTs to secure digital ownership of physical assets and collectibles and access to exclusive privileges, which are also difficult to steal or counterfeit.
We will go through the reasons why people decide to invest in the best NFT tokens that the market has to offer. From ordinary retail investors to NFT celebrity millionaires.
You should think about the benefits you'll get from our discussion below - especially if you're wondering if this space is right for you.
Advice Before investing in NFTs, you should check out the Beginner Investor's Guide to Developing NFT 2023.
Store of Value
One of the main reasons why more people are investing and buying NFT tokens is that they can represent a store of value.
It is now a simple process to mint an NFT token as something of value. Like a sporting moment or a plot of land.
However, the NFT you buy or mint, in practical terms as an investment, is worth what people are willing to pay for when you finally decide to pay with cash.
For example, the CryptoPunks NFT chain is now attracting multi-million dollar sales. Those who buy into CryptoPunk usually do so because they believe it will be a more valuable investment in the future.
Great for Content Creators
Content creators such as writers, musicians, artists, etc. can only pass on third parties to sell their products. This will lose them a significant percentage of any future sales or revenue.
For example, the popular YouTube singer earns massive amounts of money every month in advertising revenue. But YouTube artists are subject to their policies, and creators receive a low amount, often less than they earned from ads.
So creators no longer need to partner with a third party to sell their content. Now, NFT offers them the freedom to sell the property, whether it is a song, video, or painting, without referring to a third party. So that's where the best NFT tokens come into play.
Investment Product
According to stats, there are a lot of people who have decided to buy NFT tokens as an investment product. This gives a futuristic impression that buying NFT now will be of high value in the future.
As a prime example of a successful investment in NFT, and in a previous article Virtual Real Estate in Metaverse we mentioned the case of buying 100 virtual islands worth $4.3 million in the Sandbox Metaverse.
To a reader it may seem like an outrageous amount of money to invest in digital real estate, the buyer has already created virtual villas on every island - 90% of which sold out within a day at $15,000 each.
Surprisingly enough, some of these virtual villas have been resale for over $100,000.
Meaning, that the world is changing in terms of the traditional real estate development industry has now moved into its own niche sector via the Metaverse.
Here we conclude that people are looking to invest in NFT tokens that are virtual plots of land, and then build digital properties with the aim of making a profit.
Traditional Restrictions Removed
Judicial restrictions can make investing in a physical store of value in the real world difficult.
For example, many buyers find it difficult to purchase real estate in Australia. Even if they have access to the plot in question, they will encounter red tape and legal complications – resulting in high fees and a cumbersome verification process.
Now, without restrictions, you can buy NFT tokens. All this is done by dealing with non-fungible digital assets.
Small Entry Barrier
One of the reasons why people are willing to invest in buying NFT tokens is that the industry has given the opportunity to invest to those who have a limited budget.
Sure, there are plenty of real-world examples where people have paid millions of dollars for a single NFT. But some of the best NFT tokens can actually be accessed for a small amount of money.
For example, the Australian Open created a set of NFTs that were later available for purchase.
Also, for example, there was a group of NFTs that were contracted to championship matches during each 10-year period.
The 1970s edition, too, initially sold the NFT Judging Chair for AU$24.99 (about US$19).
Crucially, this means that if you are willing to risk a small amount of money in this area, i.e. you will not risk all your capital, which is why the best NFT tokens can be accessed with modest capital.
NFTs can be Used as Collateral
There are many innovators that allow you to obtain financing with the security of your NFT token.
This mechanism operates in the same nature as traditional secured loans, in which the borrower pays a sum of money in order to secure the financing deal.
However, the lending agreement was not approved almost immediately, but no credit checks are required, in the case of crypto loans, because the borrower offers an NFT that has real-world value.
Quite simply, in case the borrower fails to repay the money, cryptocurrency lending sites immediately take the NFT sale to recover their losses.
NFTs vs Cryptocurrency
The terms NFT and cryptocurrencies are used interchangeably. That is, both phenomena are represented in digital form and are built and stored according to the blockchain protocol.
Therefore, crypto assets are virtual currency in the sense that they can be used as a medium of exchange. And it comes back again to the discussion of redeemable tokens like Dogecoin.
An example is if you buy Dogecoin for $150 from two different brokers. Meaning that there is no difference between the two sets of codes you receive. According to the current market capitalization - that is, two individual Dogecoin tokens will always be equal.
For example, if an NFT represents an entire plot of land in Decentraland, then no other symbol can claim to do the same.
Although the market is full of hype and speculation - it is said that there is another major similarity between NFTs and cryptocurrencies.
In other words, since so many people have had great success with both NFTs and cryptocurrencies in terms of value, it cannot be guaranteed to continue like this.
For example, in the case of CryptoPunks, there is a chance that someone who has paid millions of dollars for a single token will find that the value of this NFT chain may be much lower in the future.
NFT Markets
We emphasize that NFT markets are not much different from cryptocurrency exchanges - in terms of both buyers and sellers. Before buying NFT tokens today, all you need first is to choose the right market. You can buy NFTs on Binance.
Reputation
You just need to ask a few questions about the reputation of the respective NFT market. which is next:
- How long has the platform been running?
- How many users does it have?
- What trading volumes do you usually produce daily?
Before venturing into the risky NFT market, you should take the courses. Also, you must be confident that your funds are safe and that the NFT token you wish to purchase is already available on the respective platform.
NFTs Supported
All you need is confirmation from the market offering the specific NFT you are interested in.
Expenses
The bulk of NFT market revenue comes from charging transaction fees. Fees are charged to both buyers and sellers, so this should be taken into consideration before choosing a service provider.
Usually, the buyer is charged a percentage of the total transaction amount. For example, if the NFT market is charging 1% and the price of your chosen token is $2000 - you will pay a fee of $20.
Payments and Wallets
When you buy NFT tokens online, you usually have to fund your purchases with cryptocurrency.
For example, if your chosen NFT is built on top of the Ethereum blockchain, the fee will likely be paid using ETH tokens.
Usually, NFT marketplaces collect payments through wallet connections.
For example, you may need to connect a Trust Wallet or MetaMask to the NFT Market, which, after authorizing the transaction, the platform will debit the number of relevant tokens.
