Are NFTs a good investment?
The craze for NFTs is quickly gaining traction among investors. Non-fungible tokens, or NFTs, have exploded in popularity in the last year, with everyone from majoring in art, music, games to Hollywood film companies jumping on board. However, many people still question whether NFTs are a good investment. Overall, it is believed that NFTs can be a high-risk investment.
NFTs are one-of-a-kind data points that are monitored and stored on blockchains such as Ethereum. NFTs provide a verifiable record of ownership via a digital ledger, opening up a world of possibilities for users to purchase, sell, and deal with digital assets.
NFTs are best known as artworks, gifs, or memes that are sold by the truckload on the internet. According to projections from DappRadar, NFT sales reach $25 billion in 2021. This is up from $95 million in 2020. The rise in NFTs is still fairly new, but a large amount of money has already changed hands between collectors.
However, some experts are also concerned that this could be an inappropriate time to enter this market, as it has grown too large and quickly under excessive hype and speculation. For instance, according to analysis by Dappradar, NFT trading volume has increased by 38,000% year-on-year to 10.7. billion USD.
Experts now advise users to purchase NFT if they want to possess it, rather than investing to resell due to the FOMO mentality. If you want to invest in NFTs, you need to learn how they function and why you are purchasing one. NFTs can command vast sums; thus there will be a lot of money to be made.
The Future of NFTs
Experts have different opinions about this topic; some are screaming “bubble,” while others think that NFTs will generate new opportunities. Meanwhile, artists and content creators argue that this is the new earning method.
It can be said that in 10 or 20 years, NFT will still maintain and even go stronger. It will be applied in more fields, not only bringing economic value but also contributing to the community. People will always find applications of NFT in everyday life.
For now, people should learn about NFT projects carefully before investing and only invest when having a deep understanding about them.
