Are you curious about NFTs and how to invest in them? NFTs have taken the world by storm in recent years, attracting millions of dollars in investment from both retail and institutional investors.
However, with the lack of understanding surrounding this new investment opportunity, many investors are still hesitant to dive in and prefer to stay on the sidelines.
In this article, we’ll show you how to invest in NFTs, examine the best NFT marketplaces, and touch upon where NFTs derive their value from.
How to invest in NFTs? A step-by-step guide
To buy, sell, and trade NFTs, you first need to navigate to an NFT marketplace. There are numerous options available, both in terms of independent platforms and markets offered by crypto exchanges like Binance and Coinbase. We’ll showcase 5 of the most popular NFT marketplaces later in the article, so make sure to check it out.
For the purposes of this guide, we’ll be showing how to invest in NFTs on OpenSea, one of the most popular marketplaces in the space. The process of investing in NFTs is very similar between different platforms so you can use the steps outlined in this article as a resource for platforms other than OpenSea.
Step 1: Open an NFT marketplace and search for the NFT you want
Arguably the easiest way to buy NFTs is to use a large and reputable marketplace such as OpenSea, which supports 8 chains as of March 2023, including Ethereum, BNB Chain, Arbitrum, Avalanche, Klaytn, Solana, Optimism, and Polygon. If you want to use blockchain-specific options, you can check the best Solana NFT marketplaces or the top Cardano NFT platforms instead.
There are multiple options to search for NFTs on most marketplaces – you can sort them by the blockchain they have been issued on, by theme, creator, the NFT collection they are a part of, and more. You can also check the rarity of various NFTs, which can be a useful measure of determining the value of different digital items and collections.
Additionally, it might be a good idea to check historical NFT sales and gas fees associated with the digital collectible you want to buy, as that will give you an idea of how popular it is. This could have substantial implications for the resell value, for instance. Also, thanks to very low gas fees, buying NFTs on Solana or Polygon can be substantially cheaper than on the Ethereum blockchain, so keep that in mind.
Step 2: Add the NFT to the cart
After finding the NFT that you wish to buy, proceed by adding it to the cart. On OpenSea, you can purchase NFTs immediately with the “Buy Now” button, but that requires that you first connect your crypto wallet with the platform.
If you haven’t connected your crypto wallet yet, proceed by clicking on the “Add to cart” button.
Step 3: Select the crypto wallet you want to use (MetaMask, Ledger, etc.)
To buy an NFT, you need to use a cryptocurrency wallet. MetaMask, Enjin Wallet, and other NFT wallets can be particularly good options for buying and storing NFTs. However, using hardware crypto wallets with a service like Ledger Live can provide an additional layer of security compared to online wallets like MetaMask.
Once you select the crypto wallet you want to use, proceed to the next step.
Step 4: Connect your crypto wallet
In order to connect your crypto wallet, you’ll first need to log in and then connect OpenSea (or some other NFT marketplace you’re using) with it. Keep in mind that you’ll be asked to sign the request before you can start using funds in your wallet to buy NFTs.
Step 5: Complete your purchase
After successfully connecting your crypto wallet with OpenSea, you can finally buy the NFT you want. Click “Complete purchase” to complete the process. Do note that you can also buy multiple items at the same time.
If, for whatever reason, the purchase doesn’t clear, you’ll see a “Your purchase failed” message.
Where to invest in NFTs? Discover the top NFT marketplaces
There are quite a few options if you are interested in investing and making money with NFTs. Here are some of the most popular options available to NFT collectors today:
Launched in 2022, Blur is one of the newcomers in the NFT space. However, the platform has quickly emerged as the leading marketplace for digital collectors, surpassing OpenSea and others. A major reason for the rapid growth was the release of the BLUR token, which was airdropped to loyal users of the Blur platform and is designed to incentivize users to trade and use Blur.
OpenSea is one of the largest NFT marketplaces. It features an easy-to-use interface, an abundance of NFT collections, and supports 8 different blockchains, including Ethereum, Polygon, Solana, and Klaytn.
Magic Eden is the largest NFT marketplace on Solana, which is the second most popular network for NFTs (trailing Ethereum). In addition to NFT trading, Magic Eden features a drop calendar that can help you keep track of upcoming releases and a launchpad platform for new NFT projects.
Binance NFT Marketplace
As the world’s leading cryptocurrency exchange, Binance offers a comprehensive NFT offering as well. One of the benefits of using Binance’s NFT solution is that you don’t need to connect an external wallet, as you can use funds from your Binance account to purchase collectibles. In addition, minting NFTs and NFT collections is very straightforward, while multiple filtering options streamline the process of finding the NFT you want.
GameStop NFT was launched in July 2022 by GameStop, a leading retailer of video games, consumer electronics, and gaming products. GameStop NFT uses Loopring, a layer 2 scaling protocol for Ethereum, to make transactions cheaper and faster. The marketplace allows users to connect and buy NFTs with GameStop Wallet.
What are NFTs?
NFTs or non-fungible tokens are unique digital assets that exist on blockchain technology. Unlike cryptocurrencies such as Bitcoin, NFTs cannot be exchanged for an equal value as they represent something unique. NFTs can represent anything from digital art, music, videos, and even virtual real estate.
Understanding the value of NFTs
The value of NFTs lies in their uniqueness, scarcity, and demand. NFTs are one of a kind, and their scarcity makes them highly sought after. In a sense, they can be thought of as a blockchain technology-powered solution for intellectual property in the digital age.
The NFT trading volume more than doubled in February 2023, indicating that the recent crypto rally brought some renewed interest to NFTs. Source: Dapp Radar
The demand for NFTs has been fueled by the rise of online marketplaces, where they are in some cases sold and traded for millions of dollars. For instance, the most expensive NFT to date sold for over $69 million. Not to mention the popular cartoon monkeys from the Bored Ape Yach Club (BAYC), which regularly reached multimillion price tags.
Whether NFT art will continue to demand these exuberant valuations in the future remains to be seen. However, it is very hard to imagine that NFTs won’t become even more widespread in the future, especially when accounting for various NFT use cases, from gaming to the metaverse.
The bottom line: Investing in NFTs is a straightforward process accessible to anyone
Investing in NFTs shouldn’t represent any kind of problem to someone who is at least somewhat familiar with blockchain and crypto. Even complete beginners can do it thanks to a plethora of easy-to-use NFT platforms that are available.
Following the 2022 crypto winter, the NFT sector saw a major decline in sales, leading to some investors proclaiming NFTs as “dead”. However, that couldn’t be further from the case, as recent data shows that there has been a strong resurgence in NFT trading in recent months.
If you want to learn more about the exciting world of digital collectibles, check out our NFT crash course, which covers all the basics, from how NFTs work to NFT wallets and marketplaces.