NFT Trading Strategy: The Short Version
The full thing is pinned at the top of the strategy section, but in includes a wordy interview with a marketer, a consultant and an artist who work with NFTs. As interesting as it is for research, it very possibly tells you nothing new. So, here’s just the bottom line.
Full article: https://www.altcointrading.net/strategy/nft-trading/
NFT arts are an interesting market. More interesting for short term traders and possibly even more interesting for marketers, agencies and social media influencers.
Marketing & Co
The bagholding risk is higher than with fungible crypto here. If you’re stuck with an alt coin through a drawdown, there is usually some chance the project will change leadership or strategy, the market will pick up and you will make it out.
NFTs are minted by few pieces only with nothing to plan for their future other than being sold and bought for art or speculation, so they are closer to crypto binary options in this sense. They can be actually worthless forever.
As a paid shill you carry the best risk/reward ratio — you only receive the money, standing no cash to lose.
Shills only stand to lose their reputation, if at all. Does that still count as speculation?
Anyway, since NFTs are hyped up, you would be stupid not to charge hyped up fees too. The opportunity here is better than in regular social media work.
Short term trading
As a trader, right now there’s not much to talk about other than buying as cheap as you can and selling as dear as you’ll manage.
You can very safely assume that the point of the majority of the participants is either to sell it again or to keep it for sentimental value. You should work with that rationale.
- Find the floor value of the NFT and buy around it.
- The price of a token goes up on mentions at social media.
- The potential valuation of a token grows with the size of the audience that might like it.
Since this is pretty much a one trick pony market, at least just now, your first thought should be how to automate your flipping workflow.
And you won’t be the first one, but you will still be early.
Long term trading
This one is the riskiest at this stage of the NFT market. There is so much NFT art out there, all of it looks pretty much random to the outsider, hard to judge what will people like in the long run when the effect of shilling and hype vanishes.
And then, will the digital art space catch on at all? It may and it may not.
You will either end up with a real valuable collectors’ item, or with a worthless piece of code and there is not much about it that you could personally control.
You can do something. Some physical art collectors create unofficial Instagram “fan” accounts for the art they own. They post photos loaded with hashtags to generate exposure for the artist’s name. With consistency over a long time this does increase the price of their collection.
But nobody will manage to stay on this unless this is something they really enjoy doing.
If you want to spend your time on this, I guess I’ll just say all power to you.