The NFT and cryptocurrency markets are now gaining more integrated acceptance in society.
With that, NFT's worth is now at $27 billion, and this includes NFT art, NFT games, and NFT virtual lands.
The non-fungible token (NFT) market has expanded this year into a $27 billion area of the crypto market, highlighting what separates the most profitable digital collectors from the rest.
NFT Worth $27 Billion
NFTs own unique data linked to a blockchain, most commonly Ethereum (ETH-USD).
They can come in the form of digital collectibles, works of art, music, video game goods, virtual reality platform, real estate, and even concert tickets.
With the advent of the metaverse as an emergent technology subject, there is already an Exchange Traded Fund (ETF) that gives investors exposure to the field by investing in publicly traded NFT artwork, properties, or companies.
Meanwhile, the industry is attracting new talent.
Brian Roberts, Lyft's former CFO, revealed on LinkedIn on Monday, December 6, that he will join Open Sea, the most popular NFT trading platform, as its finance head.
The majority of NFTs are traded on specialized internet markets that function as a cross between eBay (EBAY) and an art auction house.
Most NFT markets do not directly hold NFTs for users, similar to decentralized exchanges or other peer-to-peer crypto trading platforms. Instead, they offer customers a platform via which they can trade assets with one another.
Open Sea is the largest of these platforms by a long shot.
So far this year, nearly $16 billion has been invested in the NFT market according to Chainalysis.
NFT and Cryptocurrency Trading
The vast bulk of NFT trading is driven by retail investors in terms of transaction size.
NFT collectors and institutions, on the other hand, account for the majority of market volume, although significantly less than in the broader crypto market.
According to Yahoo Finance, the data indicates clear trends for what constitutes a good NFT collector, as stated by Ethan McMahon, the Chainalysis economist who prepared the analysis report.
McMahon added that the top ones are "more tuned into the space," more sophisticated in crypto, and have "larger bags" of funds to invest.
One evident advantage for collectors hoping to get a reasonable return on their NFT appears to be "whitelisting," or receiving a lower price at the first development of a new collection's release.
Whitelisting opportunities are obtained by collectors arriving early to a project and frequently supporting it well before its release, according to McMahon.
Making Million in NFT Art
Collectors can also profit by "flipping" a pre-owned NFT on the secondary market; however, similar to initial public offerings in stocks, the most difficult way to profit from an NFT is to buy it from a creator without being whitelisted.
According to Chainalysis research, just 28.5% of NFTs purchased during minting and later sold on a marketplace are profitable, but flipping gives a far larger possibility (65%) for a collector to earn.
McMahon further said in Yahoo Finance that "where everyone's just hyping into the project and doing all sorts of things to drive up its volume."
Just like the most popular NFT collection of all time, such as Crypto Punks and Bored Ape Yacht Club, which have the largest trading volume accumulated once they release.
While the report highlights that legitimate money can be made in the NFT market, McMahon cautioned newcomers to first pay attention and "do your research" before "aping into the latest collection."
