Everything You Need to Know About NFT stocks [2022]
NFTs have become a sensation and one of the driving forces of a decentralized economy. What once was believed to be a bubble is now a multi-million multi-purpose futuristic technology transforming every sector.
Non-fungible tokens are a very lucrative investment option. Though everyone is attracted to it, not all trust them enough to put their money.
If you buy a popular NFT, you may get good profits by selling it. However, if you do not wisely research before buying and end up with a worthless one, it will be your loss.
Moreover, due to a lack of awareness and knowledge about Non-fungible tokens, the majority of people may end up making bad buying decisions.
Keeping all things aside, if you see it from an investor’s perspective, investing early in a futuristic technology is profitable. So how can you invest in NFTs without risking your money?
The best way is to invest in NFT stocks. They offer more stability, and less risk and strengthen your portfolio.
Let us dive deeper to know more about NFT stocks.
What Are NFT stocks?
NFT stocks are similar to conventional stocks of listed companies. It refers to the stocks of companies or institutions that are involved in the NFT industry. These companies are either running NFT marketplaces or developing technologies related to NFTs.
In simple words, NFT stocks are the stocks of companies that are directly or indirectly working in the NFT sector. Thus, by buying stocks of such companies, you are actually putting your money into the companies’ projects in the NFT sector.
Rather than exposing yourself to higher risk, you are investing in technologies developed by the companies to support the NFT sector. Moreover, you do not have to burden yourself with minting, selling and buying NFTs.
You can simply explore top companies with potential projects in the NFT sector and buy their stocks. With the success of their projects, these companies will grow and simultaneously you will get profits.
What Is The Difference Between NFTs and NFT stocks?
NFTs are non-fungible tokens that represent an asset. They are built on a blockchain network and are executed as per the smart contract. These are the certificate of ownership and the proof of authenticity of the asset they represent.
NFT stocks are completely different from NFTs. These are stocks or shares of companies involved in the NFT sector. These stocks function similar to the stocks of other companies like Tesla, Honda or any other company.
When you are buying an NFT, you are investing in an asset. The asset which is valuable right now, might not be in future. If the popularity of the NFT asset you hold dies in the market, its demand will go down. No one will be willing to buy your NFT at a higher rate. In the worst case, it might not even sell.
But when you are investing in stocks, you are trusting a strong company. You are putting your money to support the company’s project. It’s different from investing in a meme, photo, art or video. You are investing in bigger technology and ambitious projects.
Moreover, stocks are safer than NFTs themselves. Every big company has multiple projects running simultaneously. Even if their 1 or 2 projects fail, your stock value may decrease for some time. But it will soon recover as soon as the company profits from its other projects.
Let’s assume you buy the stocks of Coinbase. Coinbase is a reputed and well-established crypto exchange platform. Currently, it is working to develop an NFT marketplace. The popularity of its marketplace is such that right now they have a waitlist of over 2 million.
So, when you are buying the stocks of Coinbase you are not only investing in their marketplace project but also in their exchange platform. In a way, you are investing in the company as a whole. Your profits will increase with the company’s success rate.
How To Buy NFT stocks?
Buying NFT stocks is similar to buying the stocks of other listed companies. In India, you will need a DEMAT account to buy stocks of companies listed on NSE and BSE. For stocks of companies listed on NYSE or NASDAQ, you will have to buy them through third-party platforms like IND Money and others.
Conclusion
Investing directly in NFTs is risky and might not give desired returns. While investing in stocks with proper strategy and analysis will diversify and strengthen your portfolio.
