NFTs have become popular during the pandemic, and many investors have wondered how to buy NFTs. An NFT is a non-fungible token that typically represents a specific virtual or digital object. In other words, it is proof of ownership stored on the blockchain.
Artists, collectors, and speculators have joined the movement as the price of cryptocurrencies and other digital assets has skyrocketed. It is not yet clear whether this is an unsustainable bubble that will soon burst or the birth of a new long-term asset class. However, the NFT itself holds promise to artists and has applications in the business world.
Now the question arises what is an NFT? How to buy NFT? This is what you need to know. For our readers, we have framed this article that is dedicated to NFTs. This article will help the readers to know about this new coin and readers will be able to buy the NFTs easily.
How to Invest in NFT: A Step-by-Step Guide 2022
For those of you desperately trying to get started, here’s a short four-step guide on how to invest in NFTs:
- Choose a Broker: The first step to investing in NFTs is to find the suitable broker and open an account. We recommend eToro.
- Create an account: To begin investing in NFT, you must first create an account with eToro. Filling out some personal information will take only a few minutes.
- Deposit Funds: To purchase an NFT stock, you must first make a deposit into your account. eToro does not charge any fees for deposits.
- Start Investing: You may search for a large choice of equities to invest in at the top of the eToro page. Once you’ve chosen the right NFT stock go to the Trade tab and set up your trade.
What is NFT?
An NFT is a non-fungible token that typically represents a specific virtual or digital object. In other words, it is proof of ownership stored on the blockchain. Each NFT has its attributes, including objects representing the date it was created, owner, or target. Tokens are not divisible and cannot be exchanged for other tokens, hence the name “non-fungible.”
NFTs are digital assets that represent real-world objects such as art, music, game elements, and video. They are often bought and sold online in cryptocurrencies and are usually encrypted with the same underlying software as many cryptocurrencies.
Blockchain is a database that supports non-fungible tokens such as Bitcoin and Ethereum. However, unlike NFTs, these assets are interchangeable, so they can be exchanged or replaced for other identical assets of the same value.
Different ways to invest in NFTs
There are two ways to invest in NFTs: buying through a broker or directly through the appropriate market. Let’s take a closer look at both:
Invest in NFT stocks
Non-fungible token (NFT) revenue has grown to over $2.5 billion in the first six months of 2021. If you’re anxious like most investors, these types of assets are worth a look. One of the methods you can use to invest in NFTs is to buy directly from the market; this method will be covered later. A second way to consider is to invest in stocks of companies that trade NFTs. Here are some key tasks to consider:
Read also: The 10 Most Expensive NFT Arts Ever Sold
Defiance NFT (NFTZ)
The NFTZ is an ETF issued by the Defiance ETF rather than a single NFT stock. This means you can own several promising NFT stocks with one investment. ETF stands for Exchange Traded Fund, which is similar to an index fund, with the crucial difference that ETFs can be traded at any time.
Coinbase was launched on June 20, 2012, in San Francisco, California. The brain behind this is the ingenuity of two entrepreneurs, Fred Ehrsam and Brian Armstrong. And in the same year, the platform officially launched a Bitcoin buy and sell service. Initially, the main goal was to make cryptocurrencies more accessible to friendly customers.
Takung Art (TKAT)
Takung Art offers a collection of works of art where investors can buy and deposit NFTs. The presence of this company in the market is from 2009. This particular stock is an example of how the NFT craze can quickly skyrocket stock values. Traders have got almost 300% of the value in one day. Takung Art sells physical art, especially Asian art. It is unique in that it allows for shared ownership of assets.
Cinedigm is a New York-based company primarily engaged in the marketing of film, television, and other forms of short content. In April 2021, the company launched Fandor Selects, a unique NFT film label focused on classic films. The company was founded in 2000 and over the years has grown to a market cap of over $260 million.
DraftKing is another interesting company. The company has launched a marketplace for NFTs, primarily related to athletes. It has now become one of the leaders in sports betting and investors are transitioning smoothly to NFT stocks.
Invest in NFTs directly from the market
Another way to invest in NFTs is to buy directly from the market. Unlike buying stock in a company that gives you a portion of the company’s ownership, buying actual tokens or part of a token means you own all or part of the tokens. As we will emphasize, this method requires an intrinsic understanding of how blockchain systems work and a proper crypto wallet. If you are looking for a new and more reliable way to invest in NFTs, trading stocks with eToro may be a better option. The following shows the process of investing directly in an NTF.
Best Brokers to invest in NFT
If you want to invest in NFT stocks, you need to find a suitable broker. It should be a platform with a good user interface, low rates, and security. So we have picked the two best options for you-
Launched in 2007, eToro is one of the largest trading platforms today. With over 17 million users, it is one of the most trusted platforms for investors looking for stocks and cryptocurrencies. Here are a few features that make eToro the best choice for investing in NFTs. eToro has great features that make it easy for both new and professional traders. For experienced traders, the platform offers a wide range of products, from NFT stocks to cryptocurrencies.
eToro charges a fee of £5 for withdrawals and £10/month when your account is inactive. eToro has put a lot of effort into making the platform safe and reliable. Regulated by CySEC and FCA, the system meets a high level of security and professionalism. It also uses two-factor authentication and SSL encryption for added security. So you can expect your information, deposits, and personal data to be safe.
AvaTrade is an online trading system that is founded about 15 years ago. The broker is one of the best options for stocks, forex, and current NFTs. Their platform is secure and highly sophisticated, providing investors with an easy way to purchase the product of their choice. To provide users with a great experience, AvaTrader provides several advanced features. For experienced traders, AvaTrader offers professional accounts with higher leverage and more financial trading tools.
Like eToro, AvaTrade goes to great lengths to keep your assets and information as secure as possible. We will appreciate your efforts for continuous improvement, especially the security features. To reduce the risk of digital attacks, the platform uses 256-bit encryption. It also integrates McAfee Secure to obfuscate cards or identify document details. Another unique feature is the Islamic account, which aims to improve inclusiveness.
How to invest in NFTs?
If you’re struggling to find the right way to invest in NFTs, we have the perfect guide for you. Investing in Non-Fungible Token (NFT) stocks is simpler, less complex, and less risky than trading directly on the market. Here we are opting eToro for to show the buying process because eToro is the best in all ways. A step-by-step guide to investing in NFTs with eToro is presented below-
Step 1: Open an eToro account
To invest in NFTs with eToro, the first step is to register for an account. eToro sets itself apart from its competitors with its intuitive user interface and multiple tools for investors. So, go to your browser and enter eToro to visit the website. Then, go to the ‘Sign Up Now’ icon, click on the icon and enter the required information to sign up.
Step 2: Verify the user’s identity
The regulated trading company eToro requires users to verify their identity immediately after creating an account. This process is as simple as the first. All you need to do is upload a photo ID and other documents as proof of address. Once verified, you only need to go one step further to buy NFT Stocks.
Step 3: Fund your account
Just like other investments, you must have sufficient funds to purchase your preferred non-fungible tokens. Go to the Deposits section of your eToro account and click on ‘Deposit Funds’. There are several options, such as credit cards/debit cards, e-wallets, wire transfers, and direct bank transfers. When deciding about the funds to add to your account, it is important to consider the current price of the preferred asset.
Step 4: Buying NFT
You can now buy any NFT stock you want. The secret to successful investing is choosing a good platform (which identifies eToro in this case) and then choosing stocks with high growth potential. For example, after you start focusing on NFTs, you may want to choose stocks like Cinedigm Corp (CIDM) for impressive performance.
It is also a good idea to have a strategy to increase your investment when purchasing non-fungible tokens. Again, this comes down to personal preference. You can buy and hold stocks to see price rises or to take advantage of price movements in the market. It is generally recommended to wait until the price achieves the highest return on investment before selling non-fungible tokens.
Risk of investing in NFT
Investing in NFTs offers great opportunities but there are also many risks to keep in mind. Here are some of them-
Risk of fraud
Every market in blockchain carries some degree of risk. Non-fungible tokens are no different. Efforts are underway to make blockchain technology more secure, particularly the authentication process, but cybercriminals and hackers can clone NFTs. In this case, you can buy fake NFTs that have no value. To avoid these risks, it is of utmost importance to be very careful before making payments and always verify the authenticity of the NFT you choose. You may also want to only trade with merchants you trust on the blockchain.
Smart contracts aim to automate contract contracts and eliminate third parties. For example, most decentralized platforms use smart contracts to provide cryptocurrency loans and ensure that both parties meet the agreed terms. However, hackers can still exploit smart contracts to deceive unsuspecting customers.
This is another noteworthy challenge when investing in non-fungible tokens. The value of NFTs today is largely dependent on the creativity, authenticity, and scarcity of owners and buyers. The lack of a standard way of valuing tokens means that you risk buying overvalued NFTs. Again, maintaining the value of NFTs is difficult. This means that you risk selling your NFTs at a lower value in the future.
Legal and regulatory issues
There is no set definition of an NFT trading platform that uses specific characteristics to describe a wide range of assets. For example, NFTs have unique properties, are not interchangeable, and cannot be replaced. However, some regulatory approaches have been implemented specifically for NFTs. For example, the European Commission has proposed that the Crypto Asset Market Regulation (MICA) could provide a regulatory framework for NFTs. EU and UK regulations may cause NFTs to be managed differently in the future.
Cybersecurity and fraud risk
The growth of the digital world and the popularity of NFTs have significantly increased the risk of cybersecurity and fraud. Duplicate NFT repositories with identical logos and content carry the same risks. The counterfeit NFT storage issue is also notable in terms of the risks and challenges associated with NFTs in cybersecurity. These fake NFT stores may be selling non-existent NFTs. Consumers should also be aware of concerns regarding artist phishing or NFT counterfeiting.
Is NFT the right investment for you?
The NFT movement is an early demonstration of the potential of cryptocurrencies to power the digital economy for new and wider audiences. Creating and selling digital assets means a lot to creators. However, if you are buying NFTs for collectible value, it is a speculative investment. The value is uncertain and fluctuates depending on the demand for the job itself. There are no precise and fast rules for determining which collectibles will be valued and which will not. However, early detection of new NFT trends can pay off big later.
Some digital artwork originally sold for negligible prices sold for thousands of dollars. NFTs are in the early stages of development. This is a promising new front in the tech world, but there are many risks associated with investing in this new phase of the movement. Be careful when learning about NFTs and remember to diversify to limit the risk of a single asset that hampers the process of building wealth.
If you’re anxious like most investors, these types of assets are worth a look. There are two ways to invest in NFT. It doesn’t involve much risk and as the cryptocurrency market is dropping NFT can be a good choice for you. After reading the guide, you will have the information you need to make the right decision on how to invest in NFTs. It is a safe investment for the long term. Traders and beginners can also take advantage of NFT by investing through an online broker.
The process of buying NFTs is very easy. We highlight the best brokers and have identified two preferred ways to invest in NFTs. If you’re still unsure, I’ll recommend eToro, which has worked for us and many investors. Their security is impressive and even more impressive is that their support is professional and always available.
Frequently Asked Questions
What is a non-fungible token?
It is a unique, non-exchangeable unit of data stored on a blockchain or digital ledger. Tokens are used to represent items that can be easily reproduced, such as photos, videos, and audio, along with other digital files.
How to buy NFT cryptocurrency?
To buy crypto NFTs, you have to go through a specific market like OpenSea or SuperRare. Then simply select the job or asset you are interested in and purchase it. Payments are usually made in ETH or other cryptocurrencies.
What is the most expensive NFT ever sold?
The idea of a non-fungible token can be anything and can be very useful when you have an amazing original “asset”. Twitter co-founder and CEO Jack Dorsey sold the first tweet for $2,915,835.47. Anyone can access Tweets online on Twitter, but it is now owned by Sina Estavi, who bought the NFT.
What is the future of NFTs?
Non-Fungible Tokens (NFTs) are a new digital asset and demand is surging. Therefore, NFTs are expected to continue to grow shortly. However, it will be difficult to predict the expected long-term outlook.
Should you invest in NFTs?
This is a very personal consideration and depends on your strategy. Investing in NFTs can be a good thing due to the sharp rise in demand, but be careful as the future is still uncertain. You can also diversify by including other products such as ETFs and CFDs.
Are NFT and cryptocurrency the same?
No, NFT and cryptocurrency are not the same.
How can you buy NFT stocks?
You can buy NFT stocks through any online broker such as eToro. Choosing a broker that is regulated by a financial institution would be very good for perfect security.
What are the top NFT stocks?
So many NFT stocks are available in the market, the most popular are Coinbase, Funko, eBay, and Cloudflare.