Table of Contents
NFTs trading have come forward not only as futuristic technology transforming the digital assets industry but also as a great investment alternative.
It won’t be wrong to say that people have become millionaires trading NFTs. These are the ones who could predict the market, buy potential NFTs at low and sell them for millions.
But Hold On! Not every NFT is selling for millions. Some lose their popularity and their demand dies out in the market. That is why you need to know when and which NFTs to buy and how to analyze its market for maximum profits.
Having said that, we have come up with this detailed guide on NFT trading strategies.
Let’s get started turbo card login!
Why Do You Need An NFT Trading Strategy?
Some of you might wonder why one needs an NFT trading strategy. Unlike the stock market which requires lots of technical analysis, indicators and tools, the NFT market seems lucrative and simple.
What’s so complicated about NFTs that you need a strategy?
You can buy any NFT and resell it for profit. This is where you will fail as an NFT investor and lose your funds.
Though the NFT market seems attractive and simple, it isn’t. As we mentioned before, not every NFT collection is popular and selling high. Most of the NFTs become worthless within a few months of their launch.
Similar to stocks, there are market indicators that help you evaluate how the NFTs will perform. These indicators are:
- Market capitalisation
- Diamond Hand’s balance
- Number of unique holders
- Volume traded
As a smart investor, you should also focus on certain factors while researching NFT collections. These factors include:
- Founders of the NFT project
- Utility of the NFT
- Reputation of the development team
- Popularity of the collection in the community
These indicators and factors collectively help you formulate a profitable NFT trading strategy. An NFT trading strategy will guide you towards maximum returns on your investment and reduce the risks.
Having an NFT trading strategy will:
- Help you formulate a roadmap for NFT investments
- Guide you on which NFT collections to invest in
- Targets to give you significant returns on your investments
- Reduce your losses and market risk factors
- Help you analyze your past performances and learn from it
- Saves you from sudden market fluctuations
You can formulate an effective NFT trading strategy focusing on the above points and make huge profits. Alternatively, you can start a million-dollar business venture in the NFT sphere by launching a robust NFT marketplace platform. Partner with industry experts to get premium NFT marketplace development services.
Top NFT Trading Strategies In 2022
The sole purpose of trading NFTs is to earn profits. One strategy might not apply to everyone. So, you should customize your NFT trading strategies as per your investment target.
However, we have compiled the top 5 NFT trading strategies that will never fail you.
Buy The Floor
Floor prices refer to the lowest price for which an NFT is available within a collection. For example, the floor price of BAYC is 70 ETH.
It is not recommended to buy an NFT just because it’s cheap. But you can always look for a potential NFT collection and buy an NFT within that collection at a floor price.
Buying at floor price is a smart technique as you might gain enormous profits once the NFT collection becomes more popular and successful in future. It also ensures that you are buying cheap and selling high for maximum profits.
Google NFT Trends
The best thing with Google is that you can easily find out the latest trends in the industry.
NFTs come in various niches like digital art, memes, illustrations, music NFTs, doodles and much more. You can study the Google search reports and trends about a particular niche or NFT collection.
If an NFT niche or keyword related to an NFT collection has a high search index, it signifies that the majority of people are interested in it. It also indicates that its popularity will increase in future. So, it’s a favourable time to buy it.
However, if the search for an NFT-related term is low, it indicates that the community is not so interested in it right now. In such cases, you must proceed with caution as without an NFT is worthless if its popularity dies in the market.
Invest In Collections With Few Sellers
Selling an NFT is always a battle for the buyers’ money. If you have fewer sellers for a collection, you have less competition in the market. Moreover, you can list the NFTs at a profitable price and maintain their selling prices. As the buyers won’t have many options, they will have to choose from a limited number of sellers.
However, if you have more sellers, the competition is high. Additionally, the selling price of the NFT also falls as the sellers compete to offer the best price to the buyers.
In such cases, you might not be able to sell your NFTs. You will even have to lower its prices and incur a loss.
Value strategy in NFTs always recommends you to buy high-value and popular NFTs. These include BAYC, Cryptopunks, Crypto Kitties, Doodles, NBA Top Shot and others.
Top star NFT collections might not be in your budget. But if you can afford it, these NFT collections will never let you down.
The success behind top NFT collections is its limited supply and high rarity scores. You can use various tools to compare the rarity of multiple NFT collections.
Rare NFTs with limited supply ensure that their value will increase over time.
Buy The Ceiling
Buying the ceiling is a good trading technique if you have the money for it. These NFTs are the rarest ones and are highly sought after.
Moreover, the ceiling prices may go up with the increase in the popularity and demand of the NFT collection.
The downside of this trading strategy is that you might have to suffer huge losses if the NFT project fails.
Looking to capitalize on the growing NFT market opportunities instead of being just an NFT trader?
Leverage our NFT marketplace development services to launch a feature-rich and secure NFT trading platform. We also offer white label NFT marketplace development solutions to help you enter the market instantly.
Talk to our experts today!