An NFT, or Non-Fungible-Token investor, must know when to buy and sell. NFTs have numerous trading strategies, such as the Hodl strategy. However, the best known is the buy low, trade high system, and as the name suggests, you buy NFTs at a low price and sell them when the price escalates.
This concept sounds very straightforward. However, a good and robust understanding of the NFT market is a prerequisite to making a profit with NFTs, and today, we are looking at five trading strategies for NFTs in the coming year.
Evaluating the Price of NFT Collectibles
When trading in NFTs, keep the following in mind: not all NFTs are the same, and the price depends on several factors; here are the most important factors to consider; The rarity of the NFT; Rare NFTs hold more value than their counterparts, and the more infrequent an NFT is in a collection, the more valuable it is.
Utility of the NFT; Utility refers to the practical use or purpose of an NFT. In the context of NFTs, a utility can take many forms. The level of utility an NFT possesses can affect its value in the market. NFTs with high levels of utility, or practical use, are often more valuable because they offer more value to the holder.
Tokenomics; Tokenomics refers to the economic design and principles underlying a token or NFT, including its creation, distribution, and use within a specific ecosystem. Tokenomics can significantly impact the value and utility of an NFT, as it determines the NFT’s use and the incentives that drive its adoption.
NFT Trading Strategies
NFT items cannot be judged purely on price. Most NFT collections are art in some sense; it is essential to note that a cheap NFT only sometimes guarantees good returns. Therefore, it is wise to pick NFTs based on your interests. You can find the cheapest NFTs by hopping onto a project before it launches and getting the best NFTs first. You can do this by following projects on Discord and Twitter.
Google Trends Rankings
The most used search engine, Google, provides exceptional data about what the public wants. So an NFT with a high rank on google trends means it might be the time to buy and Hodl.
Value trading may be better for some, but it is a good strategy. Buying expensive NFTs to resell based on the value can come in handy when you are loaded. However, it is best to avoid this technique if you are on a strained budget.
Buy Underpriced NFTs
Search for underpriced NFTs in the marketplace and consider the overall state of the project and its growth potential. Of course, investors should consider market prices, but there are other factors in decision-making. Therefore, it is essential to carefully research and evaluate an NFT before purchasing to increase the chances of success with this strategy.
Buy the Ceiling
Investing in NFTs with a high ceiling or top price can be a good choice for those with the funds to do so. That is because these non-fungible tokens enjoy high demand and could be the project’s best or most valuable NFTs. Therefore, if there is strong demand for the project, these top-priced NFTs may increase.
Stay tuned for upcoming news.