One of the most frequently asked questions about buying NFTs is how do I know what NFT to buy? If you’re looking to invest in NFTs, there is no straightforward answer to this question, and there is no guarantee that even if you follow the ‘rules’ for buying an NFT, it will be a worthy purchase.
However, you should not go all in buying anything random that you see: you’ll most likely take a loss unless you’re fortunate. Below we take a look at several things to consider that can help you decide what NFT to invest in and how to invest in NFTs.
- Invest in what you like
- The reputation of the team, artists, and brand
- Community
- Short-term vs. long-term investment
- Don’t invest money you can’t afford to lose
- Roadmap & where the project is at
Invest in what you like
This is generally the first thing to consider when deciding on what NFT to buy. Along with looking for the next big project, you should also be looking for the next best NFT that excites you. Do you like how it looks, do you like what’s it about, does it pique your interest in any way? You should at least be slightly hyped about the project.
For example, if you’re a sports fan, you can look into sports NFTs specifically, and if you’re a fan of NFT collectibles projects because of the charity or community they stand for, then that’s the niche you should be researching.
The reputation of the team, artists, and brand
This is really important! Do your own research on who is behind the project, don’t just take the word of an NFT influencer or some social media account that is promoting the project. These days it is much better to buy from a doxxed team than an anonymous one as there have been many scams and rug pulls from anonymous teams.
Check who the artists are behind the project, if you like their work, and if they have a good reputation. The website usually has a section on the team members or brand behind the project. Sometimes celebrities launch NFT projects only to end up walking away with everyone’s money and not delivering anything, so a word of caution: Just because it is by a popular person doesn’t mean it is legit.
You’ll usually be able to tell if the team behind the project is a solid one by looking at their bios and background and chatting to other NFT buyers. Don’t be afraid to do your research and ask questions!
Community
It’s important to get an idea of how involved people are in the project. You can easily hop onto the project’s Discord channel to see what’s happening and how engaged people are. Watch out – just because a Discord group has a lot of members doesn’t mean it is a legitimate project. Be wary of NFT projects with abnormally quick growth.
Short-term vs. long-term investment
If you’re looking to do a quick flip, you’ll want to look for NFTs that are currently hot on the market and likely to go up. You’ll need to be very active in the NFT space to find the right ones, and a profit isn’t guaranteed. If you’re looking to invest in something for the long run, then you can look for NFTs that you love with a great community and promising roadmap and team.
You can also check OpenSea rankings and CryptoSlam for trending projects and overall trading volume stats. But bear in mind that the hype can die down quickly.
Don’t invest money you can’t afford to lose
NFTs are risky, don’t invest money that you really need, which could put your family at risk if you have one. If you don’t have the extra funds to buy an NFT, wait until you do. Always anticipate that the project might not be as good as you expect it to be.
Roadmap & where the project is at
It is always safer to invest in an NFT project with a solid community that has already achieved some of its roadmap promises. The downside is you won’t be getting the NFT at the best price, but it is a much safer option if you believe in the project and are looking to invest in something long-term.
