💵 How To Start Flipping NFTs: A Beginners Guide Pt. 1 💵
NFTs are blowing up in popularity; one particular aspect about NFTs that is particularly attractive for people is the idea of flipping them.
However, before we get too deep, I am not giving financial advice, and any actions you take are done at your own risk. Hopefully, you can flip NFTs and make some money. But, of course, there is an inherent risk like any venture/investing.
When you flip an NFT, aside from you making money, a portion of the profit goes back to the creator(s) of the item. As a flipper, you also help spotlight collections, which drives up demand, creates a push on supply, and leads to automatic royalties.
However, flipping is not a foolproof way to make money. Some crowds generate fraudulent “pumps” and hype to boost value and volume. These people then trade the NFTs and cash out immediately to skedaddle. Lamentably, novices are often too late to buy before the dump, losing funds. These things can be deadly since they can eliminate enormous sums of cash in minutes.
Some people separate their NFT collections into three groups — never flip, short-term flip, and long-term flip. Short-term flips are ones they aim to sell in a few months or sooner. Long-term flips are intended to be sold sometime over the next few years. And lastly, never flips are ones they hold for personal reasons.
Discovering a system that you like can be challenging.
For starters, NFTs must be minted; this process refers to converting a digital file into an NFT, and the place where the file was minted plays a crucial role in its popularity. Over time, Ethereum has emerged as the paramount ruler, producing for most significant volume in the market. But, Solana, Tezos, and Cardano networks have gained momentum due to low gas fees and other factors; gas fees are the costs to make a transaction with an NFT, including listing, selling, or buying. Regardless, you still experience exponential profits in Ethereum, which is not too frequent in different networks. Consequently, flipping in Ethereum may produce the best results.
The other part is the NFT variety. Various artists, collections, and art styles affect the long-term and short-term value. To reduce feelings of overwhelmingness, consider getting familiar with one type at a time. Later, expand art styles (pop art, avatars, traditional art, 3D art, art blocks, etc.) and expand collections (Pudgy Penguins, Winter Bears, ON1 Force, Tezzards, etc.). Then, you can additionally research independent artists who produce one-of-one pieces or a limited quantity of pieces. Again, get familiar with little portions at a time and then expand as you get confident.
Fast and gritty NFT examination
Finding the art you want to invest in is the hardest part; there are so many choices! There are many, many factors and here are three things you can use as your guide.
The background of the artist/team is seemingly the most solid variable to recognizing a piece’s long-term profit. When it comes to collections, research the founding team. What is their history in the space? What is their reputation? What is their consistency over time? Sales volume? Collabs?
The floor is the base cost, e.g., the least expensive piece in a collection, which tells a potential buyer how much they need to spend to get in the door. The floor is additionally a comprehensive approach to understanding the existing trend (down or up). However, a downside to a floor is other buyers can alter it via buying binges; that said, you can still use it to gauge the trend if the floor is volatile or if it’s steadily moving one way or another. Both have pros and cons, just like any other form of “investing,” as you can see exponential gains/losses or more organic movement.
Volume is the amount of transactions a particular artist or compilation has in their/its history. Low volume indicates a price reduction, but high volume indicates liquidity, and liquidity is boss.
Here’s what I mean.
The capacity to market fast anytime you want is a significant cause why 10,000 piece collections perform great since 5,000 people are waiting to purchase your NFT.
If you understand those ideas, go ahead and flip NFTs. Word to the wise, though, don’t make decisions based on emotions, FOMO, or any FUD (fear, uncertainty, or doubt).
Only use money you can afford to lose.
Furthermore, consider gas fees (typically about 2.5 percent) and artists’ royalties (anywhere from 1 percent to 30 percent) when establishing the selling price.
Lastly, have fun!
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