NFTs or non-fungible tokens are unique one-of-one digital assets that allow someone to verify the owner of a digital item via blockchain technology. NFTexplained.info is a team of long term crypto investors who are well versed in the NFT space.
NFTexplained.info is in no way providing any financial advice and we recommend navigating the NFT space with extreme caution. We encourage good financial hygiene which means thoroughly researching any investment far beyond what we mention. As always, complete your own due diligence.
Let’s dive in!
A NFT is not an equity nor a security. NFT stands for a non fungible token and is a digital asset backed by and verified on the blockchain. NFTs provide proof of ownership of a digital asset – which frequently deliver additional utility, such as passive income or exclusive perks.
As always, this is not financial advice and purely for educational and entertainment purposes. NFTexplained.info is in no way providing any financial advice and we recommend navigating the NFT space with extreme caution. We encourage good financial hygiene which means thoroughly researching any investment far beyond what we outline. As always, complete your own due diligence and consider consulting a financial advisor (professional) before making any major financial decisions.
While an NFT is not a stock, there are various equities one can invest in that are in the Web 3.0/NFT space but aren’t actually NFTs themselves. If you’re interested in investing in digital assets such as crypto currency and NFTs, which are much more volatile – but can possibly offer higher returns – than traditional financial instruments, it’s better to invest directly in them in comparison to NFT stocks.
You can invest in crypto currencies directly through such popular mechanisms as downloading Coinbase or Binance (U.S. users can get a crypto trading discount on Binance!), which are the most user friendly platforms. Additionally, they have low fees and provide considerable research free to users. To buy NFTs directly, you need to establish a digital wallet (e.g. Metamask) before being able to join an NFT marketplace. After that is set up, you can purchase your desired NFT using cryptocurrency via NFT marketplaces like OpenSea. Our research team explained this process of setting up OpenSea, which you can find here.
If you are more risk averse and prefer traditional equities, there’s many blockchain stocks to consider investing in. To reiterate, these blockchain stocks are companies interested in the NFT space, but this is not directly investing in any NFTs themselves. Investing in blockchain companies is an excellent way to indirectly invest in NFTs.
In a perfect market, investor risk is rewarded with higher reward, which has resulted in many headlines of teenagers making seven figures overnight. NFTs are for the bold; risks abound – there is risk of being “rugged”, lack of liquidity, and volatile prices to contend with.
Is There An NFT ETF?
Currently, there is not an NFT ETF composed of regulated securities. ETFs allow one to invest in a basket of equities, mitigating risk by spreading it across many companies. There are some assets marketed as “NFT ETFs”, but due to the regulatory implications of digital assets, currently it’s not considered an ETF.
They are investments made with the same principles of ETFs, but done in De-fi (decentralized finance). This gives you partial ownership in many NFTs, similar to an ETF.
To invest indirectly in NFTs, one can purchase Digital Revolution ETF (NYSE: NFTZ); this ETF invests in an array of NFT marketplaces. They currently have over US $8 Million assets under management. Their top three holdings are: Funco (NASDAQ: FNKO), GameStop (NYSE: GME) and Ebay (NASDAQ: EBAY). These companies have announced plans to enter the NFT space in the future, but haven’t done much yet. Find a screenshot of their top 10 holdings below:
Screenshot: https://www.defianceetfs.com/nftz/
As always, this is not financial advice and purely for educational and entertainment purposes. NFTexplained.info is in no way providing any financial advice and we recommend navigating the NFT space with extreme caution. We encourage good financial hygiene which means thoroughly researching any investment far beyond what we mention. The team encourages you to complete your own due diligence and consult a financial advisor before making any major financial decisions.
What Are The Best NFT Stocks To Buy?
Popular and widely traded blockchain stocks involved in the space include Coinbase, Square and PayPal. These companies have significant investments in blockchain/digital assets, and are pushing to make crypto currencies mainstream.
Coinbase (ticker symbol: $COIN) is the leading platform on which to purchase crypto currencies. Their main revenue stream comes from fees incurred when buying and selling crypto on their platform.
Consequently, when the crypto/NFT markets are performing well, there will be more buying and selling action. The two are correlated; investing in Coinbase is betting that the digital asset markets will continue to do well. Furthermore, Coinbase recently created their own NFT marketplace that has a similar business model to that of OpenSea, resulting in more exposure to the NFT market for investors in this equity.
Square (NYSE: SQ), led by CEO Jack Dorsey (who also was the CEO of Twitter, but stepped down to focus on SQ) has been a prominent advocate for blockchain technologies. The firm has vocally claimed the blockchain is the future of our financial system. In addition to their widely distributed payment software, they also own Cash App which has millions of users. One can now invest directly in crypto currency via purchases made in Cash App.
Square has announced they are building a decentralized finance business using Bitcoin. When Jack Dorsey was the CEO of Twitter, he enabled NFT profile picture verification. This demonstrated his active involvement in the NFT space and is an overall bullish sentiment for NFTs. Jack Dorsey’s conviction about the future of crypto/NFT’s is a great way to indirectly invest in these digital assets, and a blockchain technology focused company writ large.
Paypal (ticker symbol: $PYPL) is known for their digital payments; however, their millions of users can now buy and sell cryptocurrencies – making them a major blockchain player. They’ve shown incredible interest in digital assets and are working to push cryptocurrencies mainstream. Paypal is also an international e-commerce payment platform. There’s significant speculation that Paypal will enable crypto payments for e-commerce payments in the future.
As a reminder, this is not financial advice and is provided purely for educational and entertainment purposes. NFTexplained.info is in no way providing any financial advice and we recommend navigating the NFT space with extreme caution. We encourage good financial hygiene which entails thoroughly researching any investment far beyond what we mention. As always, complete your own due diligence and consult a professional tax and/or financial advisor before making any major financial decisions.
Can You Invest In An NFT?
One can invest in an NFT by purchasing this unique digital asset, which is backed by and verified by the blockchain. In order to accomplish this, one must have a crypto wallet and cryptocurrency. Our research team wrote an in-depth, step by step article on how to find good NFT collection to invest in, which you can find here.
By purchasing an NFT, you are investing in it, and essentially betting that it will appreciate. NFTs tend to be illiquid relative to other traditional financial instruments, which makes them harder to acquire thus driving up the price due to the limited amount available on the market.
Investing in NFTs is investing in innovative and emerging technology; although risky, it’s a great way to gain more exposure to digital assets. Like all collectibles, NFT prices are established by the laws of supply and demand.
NFT projects often provide utility, which entails delivering access, perks, and other opportunities for holders. In addition to supply and demand, utility is primarily the drive for the valuation of these projects. The most common form of utility is passive income in the form of the projects’ ERC-20 token, the community, access to exclusive in real life events, and airdrops.
Aside from NFTs it is worth considering a broader exposure to the cryptocurrency market. Bitcoin has reached an impressive valuation in recent years; Bitcoin’s supply is fixed at 21 million units, making it incredibly scarce.
NFT collections are frequently limited to 10,000 meaning the supply can be incredibly limited when there is high demand. This is often true of blue chip NFT projects like Bored Ape Yacht Club.
In closing, this is not financial advice and purely for educational and entertainment purposes. NFTexplained.info is in no way providing any financial advice and we recommend navigating the NFT space with extreme caution. We encourage good financial hygiene which means thoroughly researching any investment far beyond the discussion presented here. As always, consult a financial advisor and complete your own due diligence before making any significant financial decisions.
The NFT space is always changing and the technology is quite new. Our team is incredibly excited to see what will happen as time goes on. To get the latest news in this rapidly evolving space, follow our team on Instagram & Twitter!
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