With all the people who have become millionaires by selling NFTs globally, it’s no surprise that they’ve become the most talked-about investment vehicle in 2022.
However, buying NFTs is not a fast lane to becoming a millionaire. To purchase an NFT and make money, you need to have developed knowledge of the industry and enough willpower to try many new things without faltering.
And also, trust your gut a lot.
The average NFT can trade within a range of $450 to $2,500, with some of them skewing upwards incredibly. Many NFTs aren’t worth much and won’t attain much value unless by artificial means, so how can one become an NFT millionaire?
Find out by reading our article!
Can you become an NFT millionaire?
It is possible to become a millionaire through NFTs: there are more than a handful of cases of NFT artists who have earned multi-millions from selling their NFTs in public auctions or marketplaces. Others are group collaborations, such as Bored Ape Yacht Club’s Yuga Labs, CryptoPunk’s Larva Labs, and other projects such as Azuki.
For example, a collection of 25 GIFs created by restaurant chain Taco Bell sold for $1.60 at one point; three days later, they sold for $20,000.
The first public NFT auctions were performed at Christie’s and sold Beeple’s Everydays – The First 5,000 Days for $69 million. It was a JPEG file that featured 5,000 unique artworks by Beeple over 13 years, so it’s called 5,000 days. Of course, such a piece is incredibly complex to create and took over 13 years to do so – you certainly don’t want to wait as much to have the opportunity to maybe sell an NFT for a couple million.
NFTs cut out the middleman, allowing creators and virtual artists to gain control over their assets and nearly complete profits bar the marketplace fees and necessary gas fees from each transaction. The core of this is that companies can’t exploit artists anymore, money-grabbing fees are mostly gone, and transactions have stopped being elaborate.
What makes an NFT valuable?
As with any investment, you need to invest wisely and safely with NFTs.
Let’s look at all the traits that make an NFT valuable and seen as a possible investment by NFT traders: quality, rarity, and utility.
Some NFTs are more valuable than others because of their quality. That’s not to say that a pixelated NFT will never reach the price of a full-blown digital illustration, but the more work put into the piece, the more valuable it is seen by investors. On top of that, if the NFT is so high-quality that it appeals to buyers of its artistic potential, that’s also a plus.
The rarity of an NFT is a crucial part of what makes it valuable. If an artist plans to distribute copies of a digital art piece infinitely, then the price of the copies will be driven down.
Some NFT projects haven’t limited themselves to simply one collection. For example, Bored Ape Yacht Club began with 10,000 digital ape collectibles, quickly selling out. Once they saw that the original apes sold out, they released Bored Ape Kennel Club and Mutant Ape Yacht Club. Since then, the Bored Ape Yacht Club has significantly expanded.
Research NFT projects before purchasing
Researching on the NFT project you buy is essential. Think of it as if it were stocks or a startup if you’re into other types of investments. Research means joining Discord groups, analyzing roadmaps, asking the right questions, investigating the creator’s social status, and analyzing past projects and successes.
If you want to delve deeper, investigate smart contract terms from the NFT project, such as restrictions, perks, and term dates.
If you want to purchase one or several NFTs from a collection, research at least twenty hours to make the most educated course of action on your potential purchase.
Hype should never be a substitute for research. If there’s a lot of hype around an NFT project, don’t let the craze encourage impulse purchases. Hype could come from a substantial community, good utility, and high-quality design, or it could come from artificial speculation. With how common pump and dump NFT scams are these days, it’s always better to take a slow approach and get to know the real reason why a project’s value and popularity are rising.
What is sell NFT?
Creating and selling NFTs is almost like creating your brand or your own business. You need to market it and promote it across the web for people to be interested in investing in it. For example, you can perform Airdrops on Twitter, promote it on Reddit’s r/NFTs and other NFT-related subreddits, and create Discord communities to create groups around your NFT project.
When selling an NFT, don’t forget to also consider the transaction fees you’ll have to pay for transacting on the blockchain. Eventually, you’ll have the chance of selling your NFT for a profit, but make sure the amount you’re selling it for is considerably higher than the floor price.
Finding the best moment to sell an NFT can be confusing, but if you do your calculations right and sell it when the value increases, you’ll always win something. What makes it trickier is that most people want to ensure they earn the most significant profit from the NFT, meaning you might want to wait a bit longer to sell the NFT if there’s a chance for the price to rise higher. Realistically, you can sell it after the price rises to earn a small profit and reinvest it, or wait longer until the NFT appreciates to sell it for an even bigger profit.
Buy NFTs at the floor price
Buying an NFT at floor price is one of the best ways to earn a profit from reselling it later. The floor price is usually a minimum selling price for the NFT. If you researched an excellent collection with much potential, buying at floor price means you can make a profit because the floor price will eventually rise.
It’s not guaranteed to rise, but that’s the reason why you research it in the first place. You’re increasing your possibilities by ensuring the NFT project you’re purchasing ticks all the boxes of a good NFT project.
On the other hand, there’s a possibility that even after an NFT project is set at a minting price, it’s resold at an even lower under-floor price. Don’t buy something if you think that prices are at their ceiling. If you’re buying something at it’s most expensive, you’re better off scouting for another project rising in popularity or with potential to do so and buy some of its NFTs at floor price.
Flip the NFTs
An excellent strategy to ensure an ebb and flow of NFTs in your collection is to flip them. Flipping means buying NFTs at a price and selling it at a higher price to earn a profit and then purchasing more NFTs to keep flipping. Rinse and repeat until you have millions in crypto.
A good idea is to start with an NFT with a relatively low floor price and flip it at a double rate of your initial purchase price. This results in a positive return on investment after you get the hang of buying and selling.
Are NFTs a good investment?
NFTs are a reasonably new concept, considered a risky investment vehicle by many circles. There has been little regulation in international markets regarding tax implications for NFTs or security measures for NFT scams. Check out our guides for NFT taxes and how to avoid NFT scams here for more information.
The point is that, as an investment in NFTs can certainly be good. There’s a reason why so many people are turning to NFT marketplaces to make a full-time living creating art. However, many NFT projects are bad long-term investments because they rely too much on speculation, on top of not adding any real value other than what people perceive as valuable.
Final words about how to become an NFT millionaire
The view on the reliability of NFTs as investments is generally mixed, but one thing is sure: you can earn a lot of money from trading NFTs.
Whether you’re an NFT artist or an investor interested in amassing a gallery full of intriguing virtual art pieces to sell once their prices rise, you need to research which projects are working and why they stand out.
Take a look at Meebits, CryptoPunks, Bored Ape Yacht Club, Azuki, and others that consistently rank top on the sales page of OpenSea. Our weekly update thread is a good starting point to find out which crypto projects are in a positive spotlight.
If you’re interested in learning more about how NFTs work, check out our guides on what is an NFT to find out.