At RealMoney Tim Collins is convinced that NFTs have a very real future for investors.
These digital assets, built on the same blockchain database technology that bitcoin and ethereum use, are seen by a lot of investors as the next cryptocurrency. Collins writes:
“As I've jumped deeper into the world of NFT investing and trading, a few lessons have fallen into my lap. And by fallen, I mean I've paid my share of NFT Trader's Tuition. Yes, that's a real thing, the same as the Trader's Tuition stock folks discuss. “
Collins isn’t pulling any punches. He’s learned some lessons both good and bad during his brief time in the NFT market so far.
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“Momentum is very real,” he writes. “The right celebrity tweet or whole entry can happen fast and draw buyers in fast. One minute an AlphaBetty Doodle NFT cost .06 ETH and an hour later its sitting at .15 ETH”
As a new and developing asset class, individuals — whales — can have an outsized influence.
“Whales exist in this market and hold tremendous influence. They have the ability to price the small players out of the market during something like a minting event if the development team behind the mint doesn't properly plan or care.”
Like any new asset, the NFT market is riddled with concepts and jargon all its own. Be careful not to waste gas while you’re trading! Sellers will quote their prices in ETH, and a hot mint can lead to gas wars. But don’t be afraid to have diamond hands just in case it’s time to hodl.
Don’t worry if that didn’t make any sense. Collins explains all of this and more in his lessons for trading NFTs. Is it worth learning about this side of the market? He certainly thinks so.
Get more trading strategies and investing insights from the contributors on Real Money.