How to make money on NFT

15 mins read

As non-fungible tokens gain more popularity, people are starting to wonder if you can make money off of them. If you’re asking yourself this same question, here’s the answer: absolutely! Just look at crypto collectibles like CryptoKitties and you’ll see that some NFTs can go for tens of thousands of dollars. So how do these NFTs and cryptos work, and how to make money with nft? Here’s what you need to know.

A lot of people are wondering, Can you make money on NFT? The answer is yes! Let’s take a look at the steps that you need to take in order to start earning while playing video games, streaming video games, or just engaging with gaming communities in general. Follow these steps and you can make money on NFT right away!

Tokens aren’t Equity

Non-fungible tokens, or NFTs, don’t represent equity. This means they aren’t subject to SEC regulations governing stock offerings and don’t have share prices. Some coins are utility tokens, which don’t give you ownership of a company but grant access to its services.

These can be further broken down into security tokens and non-security tokens. While non-security token sales are not regulated by law, that doesn’t mean they aren’t governed by other rules in a variety of jurisdictions—so it’s important to know where you’re selling your offering and how it might impact investors’ decisions.

 Generally, non-security tokens don’t have to adhere to laws governing stock offerings in their specific jurisdiction.

It’s important for investors to understand that security token offerings are subject to a range of regulatory oversight, depending on where they are sold.

While many issuers might refer to their offering as a security, it’s important for buyers and investors alike know that while they may gain ownership of a piece of an asset or business through it, they aren’t receiving shares in any existing company.

This distinction is especially important since many states treat stock as securities subject to state regulation.

Because different jurisdictions treat digital tokens differently, it’s vital that you do your due diligence before participating in an initial coin offering and that you keep up with regulations in order protect yourself and others from fraud.

Tokens are Stable, But Not Currency

There are a lot of potential benefits to blockchain, but cryptocurrency—the coins we see moving around in Ethereum and other ICOs—isn’t always one of them.

Due to price volatility, tokens in many ways aren’t as useful as fiat currencies or stablecoins for day-to-day purchases. Even though you can buy things with cryptocurrencies like Bitcoin and Ether, their price changes drastically from day to day.

If your coffee costs 0.0002 BTC today, tomorrow it might cost 0.0003 BTC or 10 ETH or $1 USD… depending on what happens next to that coin’s market value.

 Stablecoins are another option that lets you buy things with cryptocurrency without taking its price into account.

These coins, as their name suggests, maintain a stable value so they don’t fluctuate in value while you hold them. They have different rules for achieving stability. Tether is backed by fiat currency and can be redeemed if you have USD or EUR available. It’s also not strictly decentralized like most of these options.

Tokens Require Custody

It’s important to understand what cryptocurrency is and what it isn’t. Bitcoin is a token that can be mined but is ultimately just another digital currency.

By contrast, non-fungible tokens (NFTs) are a different kind of animal altogether. Once they hit their respective blockchain, they can never be moved or transferred again.

If you hold an NFT, you can sell it—but you won’t be able to go back in time and repurchase it once it sells off; by contrast, if you want to repurchase bitcoin after selling some to make a purchase, that should be possible at least in theory if not practice. That makes them quite different from one another—and valuable for very different use cases.

 Because tokens are different from traditional crypto, so are some of their advantages. One big advantage is custody; no one has to worry about how to keep them safe.

All you need is a public address and key, which means that you can trade even your grandma’s bitcoin if she wants to get her hands dirty. It’s easy enough for those with minimal technological understanding to use blockchain assets like cryptocurrency and still be secure in their holdings—and there may not be many other kinds of investments that have that property!

Don’t Sell Your Crypto Until It Pops

If you bought crypto at its peak, then you might be kicking yourself right now. But if you’re a seasoned crypto trader who knows when to buy and sell, you might have seen a spike in your holdings—or been able to sell at a profit.

This is known as The Flippening in crypto trading circles. The flippening happens when one cryptocurrency surpasses another in market cap and takes over dominance from it—similar to how it happened when Bitcoin overtook Ethereum for that top spot earlier this year. It can happen for other reasons too—maybe a new coin shows up with better technology or more potential utility than an existing one.

 While it can be easy to forget about your crypto in between trades, a good trader keeps their eye on the market and doesn’t get caught off guard by a flippening.

If you spot one coming—maybe from watching price patterns or news stories—you can sell some of your holdings and hold onto whatever you think is going to surge next. It could mean big gains later down the line if you know what you’re doing!

It should be noted that cryptocurrencies have gone through several pops before falling again. Whether any current coin will stay up after such a spike remains to be seen, but if nothing else, it can pay off to keep an eye out for them and take advantage of big market moves when they come along.

Make money with NFT

Popular Coins Are Trending Up

In collecting, there are always two types of items that lose value over time: rare and common items. The difference between these two is supply and demand.

Rarity, however, doesn’t necessarily mean a collectible item is valuable; it only means that there are fewer units in circulation or production than there are collectibles of lower rarity.

On top of that, an item’s rarity can fluctuate according to its popularity. A limited edition character from Overwatch may be extremely hard to find today, but how many people will want one in five years? No one knows for sure!

 Some digital collectibles, however, have real and active demand. These items aren’t rare or hard to find in an absolute sense, but they are still valued according to their supply because of their utility and use cases. One example is a cryptocurrency like EOS.

Many people in online gaming communities may not know about EOS yet—but when they do, their demand for a token could increase dramatically over time.

As more companies and individuals create tokens, there will be less units available for each unique application, making them all more valuable in relation to one another despite a lower overall demand from consumers over time.

Small Volumes mean Little Value

Cryptocurrencies like Bitcoin, Ethereum, and Ripple are incredibly volatile right now. While we’re only in Year 3 of mainstream cryptocurrency adoption, it’s common for these currencies to have daily moves in excess of 10%.

That means that a $100 investment today might be worth $90 tomorrow and then $110 a week later. Cryptocurrency is currently an extremely risky investment proposition; you should be prepared to lose your entire investment.

However, that doesn’t mean you shouldn’t invest! Volatility may prevent you from realizing gains but, as with any market, that simply means more opportunities for profit.

 While volatility is a downside for cryptocurrency investors, it also represents an opportunity. Just as day traders in equities take advantage of rapid price movements, you can also use cryptocurrency price volatility to your advantage. So how do you make money on non-fungible tokens?

There are two ways to do so, and both require that you predict crypto prices in advance.

The first is simply to hold onto non-fungible tokens and wait for their value to appreciate over time as more people learn about and invest in them. This makes sense if one or more tokens have a real chance of becoming a store of value, or digital gold like Bitcoin has become. However, if you don’t think that will happen then there’s another way.

When To Hold And When To Fold

In case you don’t know, HODL is a famous misspelling of hold that was used in a forum post by someone who had an irrational aversion to caps-lock. It has now become synonymous with not selling crypto-assets, even when their value decreases.

According to Unchained Capital co-founder and COO, Tiffany Hayden, it’s actually counterproductive to hold your crypto for any longer than necessary.

If you do want to HODL for long periods of time, then consider dollar cost averaging into your holdings over a set period instead of buying all at once. This will reduce risk by spreading out any potential downturns across multiple months or years.

 If you don’t know when to sell, there’s a good chance you’ll end up having too much of your assets in crypto and regret not taking profit along the way.

There are a lot of people who are against selling their crypto assets because they don’t want to miss out on future gains. In an ideal world, we could all be day traders, but that comes with its own unique set of risk factors. The reality is that most investors lose money in cryptocurrency markets due to selling at low points or buying high and selling low.

HODL! HODL! HODL!

In any industry, there are always risks involved in making transactions online. But before you jump in, it’s important to understand how things work first.

In recent months, we’ve seen a boom in non-fungible token (NFT) trading as more and more gamers buy and sell these items to other players in exchange for cryptocurrency.

However, due to its nature of being unique and distinguishable from each other, HODLing these tokens comes with its own risks that people should be aware of before purchasing them. Here’s everything you need to know about avoiding scams when buying or selling NFTs!

Verdict

The bottom line is, you don’t have to stick to one game or platform if you want to turn your NFT investment into a worthwhile source of income.

But it takes discipline and planning, so if you aren’t in it for fun alone, it’s worth doing some research before making any big purchases. The cryptosphere is chock-full of information, and some of it can be very misleading.

For more on monetizing NFT, check out Colendi’s webinar on tokens here . If you have any burning questions about NFTs or anything related to crypto, send them our way via Twitter @ColendiApp and we’ll try to help! We are hiring as well!

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