With millions of dollars in all-time token sales, almost everyone is talking about NFTs these days. People boast about making thousands, even millions of dollars buying and selling NFTs – but is it really possible? The answer is yes. One of the most common sales tactics when it comes to making money from NFTs is called flipping. Read on for a complete step-by-step guide on how to flip and get big gains from NFTs!
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Why Do People Buy NFTs?
So why do people buy NFTs, anyway? The digital art craze seems to have taken the world by storm, and for good reason. When you boil it down, there are several main reasons why people buy NFTs:
Supporting Artists
NFTs are unique in that no art purchase is one-and-done. In traditional art, once an artist receives payment for their art, that’s usually it. Meanwhile, NFTs are digital assets that use a smart contract that gives the artist a royalty every time their art changes hands.
Avoiding Fakes
Many brands are starting to use digital twins for their luxury products. Digital twins are NFTs in the form of photos or 3D models that come bundled with a luxury product, like watches. The brand provides these digital assets as a certificate of authenticity so you know you’re not buying a knockoff.
Speculating For Profit
With NFT projects like the Bored Ape Yacht Club and Bored Ape Kennel Club making vast amounts of money, it stands to reason that people are looking for the next Bored Apes. Many people buy into new NFT projects hoping it will go to the moon so they can sell it for a higher price down the line.
Depending on your risk appetite, speculating for profit can be short-term or long-term. Some people mint NFTs right away and sell them a few days later, some others buy and hold them for a long time so it appreciates in value.
Trend Following
Just like anything else, people buy into what’s popular and NFTs are no exception. Some people decide to buy NFTs because somebody influential is buying or endorsing them. For instance, people may want to buy a Bored Ape Yacht Club piece because Jimmy Fallon has one. Or perhaps someone wants to buy a Snoop Dogg NFT because they’re a fan.
Entering A Community
Since most NFT collections are limited edition, buying an NFT means you’re part of an “exclusive” community. Many NFT projects create Discord groups and Twitter communities to gather, make friends, and discuss the future of the project. If you’re looking for new, like-minded friends, you can do a lot worse than buying into an NFT project.
What Is Flipping?
Flipping means buying something for a low price, then selling it soon afterward for a profit. In the past, people flipped real estate, toys, comic books, and trading cards for many times their retail price. Flipping NFTs work the same way – you buy into a new project at its infancy, then sell it for (hopefully) many times your initial investment soon after.
Most NFT flips happen with a floor piece – the cheapest NFT in any given collection. If the project is successful, that floor piece can easily jump in price after the minting process, netting you a lot of cash on its sale.
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Why Flip NFTs?
Why flip NFTs? Profits, of course! People only flip valuable things, and NFTs have proven themselves to be very valuable. You don’t have to exclusively be a flipper, either. Even if you’re holding other cryptocurrencies and NFTs for passive income in the long run, you can also flip high-volume NFTs for faster returns.
Where Do You Start As A Flipper?
If you’re looking to flip NFTs, then you have to get into projects on the ground floor. Here are some good places to start when you’re new to trading NFTs:
Social Media Accounts
Social media, especially Twitter, is a great place to find NFT projects in their infancy. In addition to Twitter accounts for various NFT projects, you can also follow NFT influencers and listen to Twitter Spaces for extra insight on what projects may become a hit.
However, don’t just look at the account’s follower count. In addition to a Twitter account’s followers, dig a little deeper and see whether this person or project engages with their community. Transparency and community interaction is always a good thing!
Discord Communities
There’s also an abundance of NFT and crypto communities on Discord. These communities are usually one of the best places to learn more about trading NFTs, get updates on current market values, and find hot new NFT projects.
However, you should be careful on Discord. Many bots try messaging people active in NFT communities about hot new projects and invitations to a private Discord community. Most of them are very likely scammers trying to phish you and steal the contents of your MetaMask wallet.
NFT Marketplaces & Crypto Exchanges
You can also directly check out NFT marketplace sites and crypto exchanges like OpenSea and Binance to know the current market values of NFT projects. Check out the new and trending section on the trading platform to see which NFT collections are currently on the top of the charts.
As a rule of thumb, most great NFT projects to buy and flip feature the lowest price floors and high market volume.
Monitoring Tools For Minting Platforms
There are some free and paid tools that let you keep a close eye on minting platforms and tell you which NFTs are on the rise, providing insight on which ones you should buy. Some of these tools even allow you to automatically mint an NFT the second it drops.
How To Spot Hot NFT Projects
Now that you know how to start flipping NFTs and where to find them, the next item on the list is to know how to spot promising projects. Here are some things to consider before buying into an NFT project:
Project Team
The first thing you should know before making purchasing decisions is the team’s trustworthiness. Anonymous teams mean that if something happens, it’s hard to find who’s accountable. Meanwhile, projects with real names and social media attached to them are more trustworthy.
It also helps if the project team involves a “name” outside the crypto space in some way. For instance, an NFT project with GaryVee or Beeple’s name attached to it will likely have more eyes on it compared to a project from a virtual unknown.
Strong Community Sentiment & Activity
Another measurement of an NFT project’s “hotness” is its community sentiment. Peek into their Discord server and/or Twitter account and see what people are saying about the project. Remember to check for active engagement and a strong community, not just its follower count.
Art Appeal
The piece of art itself is also essential when it comes to NFT. Is the NFT a legitimately good piece of art or has high meme potential? The better an NFT project’s art looks, the more likely it is to increase in value on the secondary market.
Associations And Endorsement
Like other products, celebrity endorsements matter. Bored Ape Yacht Club became as big as it is now thanks to high-profile buyers like Stephen Curry and Logan Paul. Be on the lookout for celebrity-associated NFTs because they’re more likely to go to the moon.
Whale Wallets
Whale wallets are wallets owned by big-time NFT investors. Some people watch whale wallets of investors they trust so they can “copy” their calls and buying decisions. Generally, reasonable NFT investors would get into projects with a high market volume and low floor price.
Utility
Not all NFTs exist simply as art. Some NFT projects have legitimate utility that you can use for other things. Take the wildly popular game Axie Infinity, for instance. Its in-game pets, called Axies, are NFTs – which means every Axie is unique. These unique pets grant you different advantages when you battle other players.
NFTs with utility doesn’t mean it has to do something big like grant you access to events or prove an item’s legitimacy. Some NFT projects like CryptoPunks and Bored Ape Yacht Club simply provide its buyers with a profile picture that’s unique to them, because nobody else in the world owns it.
Project Roadmap
An NFT project’s roadmap is perhaps one of its most important parts. Most NFT project roadmaps contain upcoming important dates and future plans, which makes them required reading if you’re about to buy into a project for the long run.
A Beginner Guide On How To Flip NFTs For Profit
Flipping NFTs is a high-risk, but high-reward tactic for making money. To help you learn, we have some strategies and tips you need to keep in mind when making purchasing decisions:
Buy In Bulk & Sell Individually On The Secondary Marketplace
Buying NFTs in bulk tends to be cheaper compared to purchasing them individually. If you have enough money, you can offer token owners a bulk buyout, but resell them down the line individually in the secondary market at increased prices.
Rely On Skill, Not Just Holding
Having diamond hands is important in both crypto and NFT investing. However, HODLing everything in your crypto wallet without doing anything can sometimes backfire. If something happens to tank its price, you may end up holding NFTs that are worthless in the secondary marketplace.
It’s okay to sell on the secondary market for a small loss or take the small win if it means not taking bigger losses later on. As the song goes, you need to know when to hold them and know when to fold them.
Understand The Risks And Rewards
Aping into flipping NFTs is a good way to lose money quickly. Like all investment decisions, be sure to DYOR and understand what you’re getting into before putting something into your crypto wallet. Learn key terms like market volume, trading volume, floor price, gas prices, and other related keywords so you don’t get lost.
One of the things that make NFT flipping risky is that it’s an illiquid asset – meaning it’s not as easy to sell as, say, a cryptocurrency. NFT flipping is a risky business, but it can also be profitable for token owners who know how to do it well.
Hold Long Term Or Flip?
HODL or flip? That depends on what kind of NFTs you’re buying as well as your risk appetite. If you’ve done your homework and conclude that an NFT is going to hold value well into the future, then hold. If you think a project is going to be a flash in the pan, then prepare to flip them as fast as you can.
Watch The Floor
An NFT project’s floor price represents the cheapest item you can get in it. While it’s not foolproof, watching how the floor price moves is a great way to feel the project’s stability. If the floor goes up and down constantly, it means buying into the project may lead to big wins and losses. However, if the floor stays relatively stable, it’s a sign of organic growth but slower price movements.
Research, Research, Research
FOMO-ing into an NFT project or collection usually leads to anxiety and paper hands. Before you buy into any NFT project, it’s best to DYOR and look further into it. If you FOMO into an NFT, any price drop will cause you to worry. However, if you believe and support the project, you’ll be able to sail through the bad days with a pair of diamond hands.
Invest What You Can Spare
We’ve all heard the stories of people who ape into crypto and NFT and turn into millionaires. But for every NFT millionaire, there are hundreds of broke apes. While it may seem “boring” to some, remember to only invest money you can spare so you can still pay your bills and food even if you lose everything on a bad call.
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The Future For NFTs
As the technology behind NFTs develops, we’ll undoubtedly see more and more uses for non-fungible tokens in daily life and business. NFT gaming and play-to-earn games are one of the fastest-growing corners of the NFT space, with some people even quitting their jobs to make a living out of games like Axie Infinity.
NFTs are also becoming more and more beneficial to artists. In the past, nobles and royalty became patrons to artists, supporting and funding their craft. NFTs can provide a modern version of that where fans and collectors can directly support their favorite artists without any third-party mediation.
It’s not all about digital images, either. Many NFT projects are starting to move into the virtual reality and augmented reality space, creating art pieces and digital objects that you can interact with as if they were real.
Aside from the aforementioned possibilities, NFTS can be used for other things like event ticketing, profile pictures, digital twins, and many more. With the decreasing reliance on corporate patrons or brands, artists and creators can make just about anything they want in the crypto art space.
NFT Flipping FAQs
Even with the abundance of resources, there’s still a learning curve when it comes to NFTs, blockchain technology, and the secondary market. So we’ve answered some common questions about NFTs here:
What makes NFTs valuable?
Just like in traditional markets, NFTs are valuable because of their scarcity. Like a Picasso painting, there’s only one single owner of a certain piece of NFT in the world. Because of that uniqueness and scarcity, people put a lot of value in NFTs and would trade thousands of dollars for one.
Why are celebrities embracing NFTs?
The reason celebrities embrace NFTs varies – they could like it because they want to support the artist, or they could just treat it as another endorsement opportunity like with shoes or apparel. Either way, celebrity endorsements are one of the best ways to make an NFT jump in value.
Closing Thoughts
Flipping NFTs is risky but can get you a lot of money if you play your cards right. Similar to other investments like real estate and the stock market, doing your own research is one of the most important things you can do before starting.
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