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NFTs is allowing talented artists to express their craft to a wider audience thanks to blockchain technology.
I have developed a methodology to choose appreciating NFTs from a valuation standpoint.
Time for a thread
I have developed a methodology to choose appreciating NFTs from a valuation standpoint.
Time for a thread
1/ First thing to do is to look for the trend and theme. What are people interested into while buying a piece of art ? What is the demand ? Today’s trend as an example is crypto art with themes on #Bitcoin 
and #Etherum. These are the best selling pieces from price appreciation.
and #Etherum. These are the best selling pieces from price appreciation.
2/ Now search for Artists. Check if the artist has a website or social media. This signals to the investor the professionalism of the artist and whether he or she has long term goals to pursue a digital art career.
3/ Look for 2 key metrics.
(1) number of followers
(2) uniques pieces of art created by the artist
Divide (numbers of followers/ unique pieces of art), the more the ratio is greater than 1 the better. This ratio measures demand from investors for the artwork of the artist.
(1) number of followers
(2) uniques pieces of art created by the artist
Divide (numbers of followers/ unique pieces of art), the more the ratio is greater than 1 the better. This ratio measures demand from investors for the artwork of the artist.
4/ continuing on the ratio, scarcity is key. Why ? because it shows the artist’s craft and quality behind each art pieces. It signals to the investor that pieces of art produced have been hard to produce, more time has been spent etc... so if (2) is low that’s great.
5/ Also look for the number of pieces sold on the store. If the artist has sold let’s say 80% of its Artwork, it means that there is a high demand for the artist’s craft. This is key for investors as it making the market agreeing on the fact that the artist’s work is good.
6/ you can also look on the secondary market how many times a piece of art has changed owner’s hand and at which price. If the artwork has change hand 1-3 times and has an appreciating price history. Then this is a good sign of demand as well as quality of the artwork.
7/ Watch for collectors who are collecting the artist’s work, check if they are whales, which artists are they collecting, how many times they are buying one specific artist, what type of art they collect, how much money are they putting in etc.....
8/ Now the last step is the subjective part, if your buy a piece of art for enjoyment and not for investment then you can skip the entire process and buy according to your tastes and enjoyment. However, for investors I do believe the subjective part must come last.
9/ As far as I am concerned, I do like finance theme art, nature and abstract. I look for vibrant colorful pieces, history behind the piece, complexity etc..... I like to enjoy the art I buy and this enjoyment must last for decades. This is key enjoyment should last long term.
10/ So this is how I proceed while investing into NFT art. This is a non exhaustive list as the industry is still so early with a $300 million market cap. Any thoughts @DCLBlogger ?
#Ethereum #NFTs #NFT #Blockchain #digitalartwork #blockchainart
#Ethereum #NFTs #NFT #Blockchain #digitalartwork #blockchainart
