There is a process of evolution going on in businesses. Various significant changes have altered the shape of businesses and how they are conducted. Among the newer trends in the broader stock market are NFT stocks that challenge the traditional marketplace’s existence because of the benefits NFTs offer.
The result of the blockchain is that the NFT marketplace is taking new shapes and making business innovative and easier. One of these is NFTs, which is essentially different from cryptocurrencies like Bitcoin, Ethereum, etc. The difference between cryptocurrency and NFTs is that of fungibility, which is explained as follows.
What are NFTs?
NFT stands for ‘Non-Fungible Tokens .’ These can be explained as tokens that can be replaced for something else other than similar. For example, if we take a Bitcoin and replace it with another bitcoin, then it is defined as their fungibility as the two are the same. This is not possible in the case of the non-fungible token, the digital assets that the same thing can’t replace.
To bid on these digital assets, you’ll need to open and fund a crypto wallet on an NFT marketplace. A crypto wallet, like a digital wallet on an e-commerce platform, stores cryptocurrencies needed to purchase an NFT. A wallet needs to be funded with the crypto needed to buy a targeted NFT. For example, an NFT built on the Ethereum blockchain technology might require its purchase in Ether tokens. Some NFTs use other blockchains as well, such as Solana and Polkadot.
NFT stocks distinctions
There are different speculations about the NFT stocks. Some say the NFT hype won’t last for long, just like what happened to the Dutch tulips, dot-com craze, or other trends. Others believe that NFT space has come to stay long and won’t vanish like the trends above.
NFTs can be different things like art, videos, music, pictures, etc. These items can be bought on the online platform using cryptocurrency. Once a person buys an NFT using a cryptocurrency, the same code encrypts the purchased NFT digital token. The NFT world seems a mystery, but it is not that complicated as it seems.
The NFT hype is a recent phenomenon, though they have been there in the market since 2014. There is an extensive rise in the use of NFT stocks are seen to buy and sell artwork online. If we take the estimated money spent in the NFT market to purchase items since November 2017, it might be shocking for many, $174 million. The value of NFTs lies in their uniqueness.
They are available in limited amounts and are sold as soon as they are available for sale in the NFT market. The NFT marketplace is seeing a huge boom because people desire to own unique assets, especially digital art. Blockchain technology ensures that the original object is uniquely coded and identified wherever it is. It is for this reason that the prices of NFTs are soaring in the market. NFT stocks are essentially different from other digital assets, as they are limited in number. This raises their value because of the high demand.
Even though the NFT stocks are rising, some digital assets are already available on digital platforms, like gaming NFTs from NBA team matches. Their intellectual property remains undisputed because many people own their copies. Other digital art pieces can be sold online. The seller needs to find a suitable purchaser to sell their digital art.
Growth of the NFT Market
The reason for the growth of the NFT trading hype is the non-fungibility of the item. As said above, fiat money and cryptocurrencies can be replaced while NFT stocks can’t be replaced, which adds to its demand. It is the digital signature in NFT stock that makes each item unique.
NFTs have been seeing their growth since 2017, but 2021 proved a very lucky year for them. The monthly sale of NFTs for different companies amounted to $2 billion a month. This is tremendous for an industry that is based on the sale of digital assets.
The reason for the growth of the NFT market is not just the shortage and demand of items but the huge profits that they attract. For example, if a person purchases a digital asset for $15K and earns them a profit of $10K a month, then the market will see a boom. For the mentioned reasons, the cap of the NFT market has grown to $7 billion.
A further addition to the gains of this market is the trust of top auctioneers like Christie’s and Sotheby’s. This reputation leads not only to the trust of the market but also to the customers’ further attraction. Even though companies are earning much in this market, various legal and intellectual issues are related to this sale mode. Many countries haven’t made any legislation yet to counter NFTs-related problems.
NFTs are yet to be developed properly, like protection from hacking, intellectual property theft, and other issues. Once these are solved, these can be used as a more reliable token for sale and purchase. It might also be helpful for fine art enthusiasts and artists to communicate and find a favorable environment.
In the future, it might also be used to buy accessories, sales of brands, or fulfill other consumers’ needs. Investors are working on improving the area of sales and buying from crypto assets to daily life needs and
How to choose the best NFTs
Before you buy or sell NFTs, you need to know about some basics. The complete idea of these basics will ensure you profit and guarantee that you don’t lose your investment.
The first thing you have to investigate is why an NFT is worth its selling price. But then, as they say, the customer is always right; even though many customers don’t have a clear idea of what they are buying, especially excluding the intellectual rights, they buy these items on a whim or an instinct for what will sell higher. This leads to a boom in the NFT market.
Cryptocurrencies often confer value to the intangible, but NFTs go a bit further and apply that concept of the store of value to more collector-oriented objects. NFTs have become a token for the exchange of digital and non-digital assets. So, the user can also use this reason to buy or sell their assets. These tokens can be used for utility purposes and will bring profit to the user.
The user should also consider the problems related to NFTs like manipulation of prices, transaction issues, and other issues related to fair trading. In the future, many of these issues will be solved, so it will make a choice easier for the users.
Areas in which NFTs are growing
The rise of investing companies in NFTs and the growth of this platform led to different industries shifting to this domain. It has also impacted the stock market of non-fungible tokens – NFTs which have grown significantly. Some of the areas in which NFTs/digital tokens are proving useful include the following.
The big deal about NFT’s rise is the interest of the entertainment and fashion industry in this area. The fashion icons and brands have led customers to invest much in NFTs. The competition for limited supply has led to clients offering more than the actual price for the item’s ownership.
NFT is helping ensure the ownership of luxury items using the unique coding for each product. The digital record also shows that that asset is not counterfeited by other brands. It ensures a safe platform for the growth of fashion companies which has led to more people investing in it. The financial market data is witness to the growth.
Gamers need to add custom items to their games. Many investors have invested money in the gaming industry to add uniqueness to their games. These investors have worked on improving their gaming to provide better entertainment opportunities to their viewers. NFTs have also helped raise their games’ market value.
Ticketing is also going through an evolutionary phase using NFTs. Use of these tokens, the stealing of tickets will become impossible. If a person exchanges their ticket, it will be saved in the record. More importantly, it will help in the prevention of fraud. Also, selling tickets is easy using technology like NFTs.
Collection of items like memorabilia, antiques, and other items have interested human beings for a long time. NFT stocks are making their collection easy. A company launched using NFTs will perform better in comparison to traditional businesses.
Blockchain tech attracts users and investors, conveniently bringing the owner more revenue. The supportive community helps the art, entertainment, and collectibles industry more than the traditional market. Sharing portfolios on NFTs also enhances the reach of the owner of the business.
What are NFT stocks?
How relevant are NFT stocks now, might you ask? Well, like most hot consumer trends, investors and organizations alike are more than eager to get involved. Because of this, companies of all sizes continue to make their entrance into the NFT world.
Non-fungible token (NFT) sales jumped to more than $2.5 billion in the first six months of 2021, according to digital analytics firm DappRadar. This year, the figure reveals the explosion in popularity for the digital tokens, evidenced by NFT sales in 2020, per DappRadar calculations, which stood at just $94 million. Investors eager to explore this new market should keep an eye on famous NFT stocks like Twitter, Inc. (NYSE: TWTR), Cloudflare, Inc. (NYSE: NET), and Mattel, Inc. (NASDAQ: MAT), among others.
These firms have helped make NFTs more popular. Earlier this year, Twitter, Inc. (NYSE: TWTR) chief Jack Dorsey sold his first tweet via NFT for nearly $3 million. Cloudflare, Inc. (NYSE: NET) has helped improve trust in digital tokens by marketing the new technology to enterprise clients through the products it offers.
Funko CEO Brian Mariotti states that:
We have the ability to disrupt this space in a way that nobody else is doing right now. We can tie digital NFTs to our fan base and link entities with physical products.
Moreover, the company has some exciting licenses in the works, which it will market using NFT giveaways. Like other new players in the NFT space, Funko uses NFT as an effective form of advertising.
The company has been doing exceedingly well from an operational standpoint and is recently coming off a blowout second quarter with triple-digit revenue growth. FNKO stock is a top NFT stock to invest in at this time.
Take a look also at Visa (NYSE: V) or Shopify (NYSE: SHOP). Both companies made waves in the NFT space recently. Visa purchased a $150,000 NFT with plans to better understand the inner workings of NFTs before offering related consumer services. Shopify now allows select merchants to sell NFTs, providing a more mainstream platform for NFT enthusiasts. Five top NFT stocks are worth considering in the stock market now.
- Dolphin Entertainment Inc. (NASDAQ: DLPN)
- Funko Inc. (NASDAQ: FNKO)
- Shopify Inc. (NYSE: SHOP)
- Cinedigm Corp. (NASDAQ: CIDM)
- Visa Inc. (NYSE: VISA)
NFT Stock #5: Visa Inc. (NYSE: V)
At the end of August, Visa made headlines by spending $150,000 on a CryptoPunk NFT. This news didn’t do much for Visa stock. But it did goose CryptoPunk trading. Trades of the ‘first NFT’ went up more than 450% the week Visa bought in.
Visa framed its buy as a first step into the NFT space. An August press release hinted at “some new concepts and partnerships that support NFT buyers, sellers, and creators. If and when that news drops, expect more sympathy plays, or when the price spikes, the opposite FOMO.
Best NFT Stocks to watch today according to NASDAQ
NFT Stock #1: Dolphin Entertainment Inc. (NASDAQ: DLPN)
Back then, it seemed DLPN was just the latest junk stock to spike on NFT news. In March, DLPN partnered with Hall of Fame Resort & Entertainment Co. (NASDAQ: HOFV) on an NFT venture, and all charts show their partners are all roadkill. DLPN’s partner this time is one of the largest U.S. crypto exchanges, FTX.US. The plan is to establish a large-scale NFT marketplace. Who knows if anything will come of it? For now, DLPN is still grinding away, ready for the next news spike.
How to buy NFT stocks
How to Buy Stocks on the NYSE
- Using your computer, search the Internet for an online broker.
- Choose the broker with the best fee structure.
- Set up your account.
- Do your research.
- Find the stock.
- Find a quote.
- Determine how many shares you want to buy.
- Make the purchase.
Weigh the risks, and diversify your investments — perhaps by mixing in cryptos as well as stocks of businesses developing blockchain technology to your NFT portfolio. Trading stocks on a centralized exchange is more complicated than crypto trading on decentralized exchanges.
Wrap up – growing NFT World
NFTs might seem a useless thing these days, but it is the future of the marketplace. It will radically transform the buying and sale. As the improvements in this domain continue, there will be a growing trust in NFT stocks. When this continues, the real worth of this market will be more than what it is today. With the NFT sector growing at an exponential rate, they have the potential to catch fire again.
Though it seems uncertain today, the developments in blockchain technology and metaverse make it possible that NFTs won’t get irrelevant. It will be safe to say that the future belongs to non-fungible tokens and their market.
Overall, while cryptocurrencies like Bitcoin (BTC) face volatility, interest in the underlying blockchain tech around them remains high. Even upcoming names in the NFT space like Vinco Ventures (NASDAQ: BBIG) are now involved in the meme stock trade. This is evident, seeing as BBIG stock is currently up by over 700% year-to-date.
Here’s a tip from an NFT stock trader:
By learning their charts and history, you can prepare. Luck favors the prepared mind…That’s because trading doesn’t come down to luck. The patterns that I trade tend to repeat, and I want to be ready the next time they do.-Tim Bohen, NFT Stocks Analyst and Trader