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Some Risks of #NFT Investing.
A thread to understand BOTH sides of the spectrum.
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A thread to understand BOTH sides of the spectrum.
Thread
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2/ Infant Industry.
Future of the NFT Industry is extremely promising, that doesn& #39;t mean every NFT you own willhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="🚀" title="Rakete" aria-label="Emoji: Rakete">.
Some projects will sustain and turn into giants, most will wither and die.
Just like in 2017, I increase my holdings as projects become more established.
Future of the NFT Industry is extremely promising, that doesn& #39;t mean every NFT you own will
Some projects will sustain and turn into giants, most will wither and die.
Just like in 2017, I increase my holdings as projects become more established.
3/ Do a TON of research.
Take your sweet time learning and absorbing ALL the info you come across.
Read every article on my http://dclblogger.com"> http://dclblogger.com home page and blog posts.
@AndrewSteinwold, @MetaZoneio, @NonFunGerbils, @OpenNFT, @FrankyNeedles podcasts/youtube vids are some
Take your sweet time learning and absorbing ALL the info you come across.
Read every article on my http://dclblogger.com"> http://dclblogger.com home page and blog posts.
@AndrewSteinwold, @MetaZoneio, @NonFunGerbils, @OpenNFT, @FrankyNeedles podcasts/youtube vids are some
4/ Liquidity is quite low.
Easy to buy, hard to sell NFTs.
There is no agreed & #39;market price& #39; like cryptocurrencies on exchanges you can exit at.
EACH NFT has a different price and you have to usually wait for a buyer to sell to if you need to cash out.
Easy to buy, hard to sell NFTs.
There is no agreed & #39;market price& #39; like cryptocurrencies on exchanges you can exit at.
EACH NFT has a different price and you have to usually wait for a buyer to sell to if you need to cash out.
5/ Liquidity again.
So important.
If you buy 50 ETH worth of NFT& #39;s but the project has only transacts 10 ETH worth of volume every 7 days. You& #39;ll have to wait months to sell your position.
My strategy has always been to enter at a GREAT price so I can exit if I need to.
So important.
If you buy 50 ETH worth of NFT& #39;s but the project has only transacts 10 ETH worth of volume every 7 days. You& #39;ll have to wait months to sell your position.
My strategy has always been to enter at a GREAT price so I can exit if I need to.
6/ Hype.
People RUSH to new NFT presales.
A month later, it& #39;s quiet and everyone& #39;s moved to another NFT presale.
I wait till after FOMO and see if growth, enthusiasm, progress sustains.
This requires a GREAT product and community.
Key for longevity.
People RUSH to new NFT presales.
A month later, it& #39;s quiet and everyone& #39;s moved to another NFT presale.
I wait till after FOMO and see if growth, enthusiasm, progress sustains.
This requires a GREAT product and community.
Key for longevity.
7/ Funding.
Many NFT projects have folded.Finding a sustainable funding model is hard.
Can& #39;t keep selling NFTs as you& #39;ll keep diluting investors UNLESS there& #39;s community growth.
VC backing = better chances of lasting first 2-3 years.
Still respect boot-strapped projects tho.
Many NFT projects have folded.Finding a sustainable funding model is hard.
Can& #39;t keep selling NFTs as you& #39;ll keep diluting investors UNLESS there& #39;s community growth.
VC backing = better chances of lasting first 2-3 years.
Still respect boot-strapped projects tho.
8/ Cryptocurrency Price Swings.
Historically we& #39;ve seen the NFT market freak out when BTC/ETH/Crypto Moons or Dumps.
People FOMO in or out and they sell their NFT& #39;s much cheaper than & #39;market price& #39; to secure a sale.
Sometimes this sets off a ripple effect.
Historically we& #39;ve seen the NFT market freak out when BTC/ETH/Crypto Moons or Dumps.
People FOMO in or out and they sell their NFT& #39;s much cheaper than & #39;market price& #39; to secure a sale.
Sometimes this sets off a ripple effect.
9/ Not a risk - but Art is somewhat immune to the above.
Maybe because people have more attachment to their pieces and are in it long term.
Hence why I& #39;m bullish on the Art Industry as a whole.
Maybe because people have more attachment to their pieces and are in it long term.
Hence why I& #39;m bullish on the Art Industry as a whole.
Whales.
They have major influence. Most NFT projects have relatively small market caps, (1-3,000 ETH).
One crypto whale can dominate this.
What if they decide to sell?
I like to see a variety of whales. Ideally 100& #39;s, 1,000& #39;s of investors making up the total market share.
They have major influence. Most NFT projects have relatively small market caps, (1-3,000 ETH).
One crypto whale can dominate this.
What if they decide to sell?
I like to see a variety of whales. Ideally 100& #39;s, 1,000& #39;s of investors making up the total market share.
Fake Volume.
I& #39;ve seen this. Beware. Look deeply into top buyer/seller wallets of some NFT projects.
Just because there& #39;s a lot of trade volume doesn& #39;t mean it& #39;s healthy. Easy to wash trade.
I& #39;ve seen this. Beware. Look deeply into top buyer/seller wallets of some NFT projects.
Just because there& #39;s a lot of trade volume doesn& #39;t mean it& #39;s healthy. Easy to wash trade.
Am sure I& #39;ve missed some. Will add if I think of more.
