2021 was filled with plenty of notable crypto-related headlines, but NFTs arguably stole the show. The digital asset, once a niche item, became a mainstream phenomenon last year and is now either loved or loathed depending on why you talk too.
Some see NFTs as merely JPEG images, assuming the hefty prices some pixelated faces or other graphic design projects command is a big scam. Others see non-fungible tokens as the future of ownership and a unique way for creative types to market and sell their work.
No matter which side one falls on – NFT growth numbers speak for themselves. Already by February and March 2021, Dapper Labs’ NBA Top Shot NFTs enjoyed $200+ million in monthly trade volume.
Interest from celebrities and other notable figures continued to drive the NFT market up in 2021. DappRadar data from the end of the year revealed the NFT market generated more than $23 billion in trade volume across 2021. This hefty sum was a far cry from 2020’s revenue – less than $100 million.
NFTs Continue to Gain Momentum in Q1 of 2022
So far in 2022, the surging market seems to have no sign of stopping. NFT sales in the first week of the new year alone reached $500 million, according to NonFungible.com.
Unsurprisingly, NFTs are now a hot discussion topic among investors looking to add to their portfolios. While stories of high prices might make NFTs seem like a winner – research shows a different story.
Chainalysis research from the end of 2021 found how insiders actually might have the upper hand in the NFT investing world. The study revealed how whitelisted buyers of new NFTs profit 75.7% of the time, compared to 20.8% for everyone else. Overall, in the words of Chainalysys, “a very small group of highly sophisticated investors rake in most of the profits from NFT collecting.”
While preferential treatment is not new within the cryptocurrency world, prospective NFT investors should not feel like they are completely shut out.
In fact, there’s an array of tools anyone can use that can play a large part in a successful NFT trading strategy. Keep reading below to learn more!
Rarity is one of the most well-known platforms within the NFT space, and for good reason. The best NFTs are hard to find and highly desirable, and rarity.tools allows investors to sort NFTs by volume, availability, and average price. This free platform allows those interested to research the attributes of different NFTs and analyze collections in a user-friendly manner.
Touting itself as “your home to Web3,” Zapper lets users track and easily see all of their DeFi assets, including NFTs in one place. The advantage here is multifaceted for NFT holders. Understanding the net worth of an NFT portfolio means you can quickly figure out the floor prices collections are at. Zapper use can be combined with research on Twitter or Discord to figure out what collections have a strong community and understand what NFTs might jump up in value soon.
NFT Stats is a simple tool with a lot of utility. The platform offers insights like the top NFT collections sold over periods of time, like within a day, a week, or a month. Clicking on each collection offers more details about what NFTs sold and pricing charts for the last few months. Understanding what’s trending, along with volume, helps investors make more educated choices about where they put money.
Etherscan might seem intimidating to new NFT investors due to its technical nature. But understanding how to read smart contracts and having access to real-time transaction details can be a big advantage for NFT buyers and sellers. For example, investors can use Etherscan to check out the gas fees paid by NFT buyers so they can calculate if flipping an NFT is worthwhile. Investors can also use Etherscan to directly mint NFTs from a project contract to ensure they are using the right one.
NFT investing will only grow more popular as the market for non-fungible tokens increases. Investors should know they have access to a wide array of tools to help guide their investment choices as they research different collections and watch for the next big opportunity.