The information provided in this article is for educational and informational purposes only and should not be construed as financial advice.
That said—let's start with a brief history of NFTs.
NFTs, or non-fungible tokens, became increasingly popular in the world of cryptocurrencies back in 2021. After a long bear market, many collections like Pudgy Penguins made a blasting comeback, while the NFT market itself is going through a sort of renaissance, and is predicted to reach $2.378 billion by the end of 2024.
So let's discuss the main reasons for trading NFTs, and how to do it in both times of market turbulence and bull market.
01. Jump in before the next NFT bull run
Bitcoin reached it's new ATH right now, Ethereum is up, meme coins are, well, doing their thing—and the halving is about a month away.
But, what's happening with NFTs?
Right now might be the moment to try and benefit from joining the NFT game early.
If you check out the history of NFT prices alongside the crypto prices of the blockchain they're on, you'll notice that some of them were being traded for crazy amounts of crypto before the prices dropped. What you might not know is that, typically, certain NFTs increase in crypto value even as their prices in USD go down.
By buying into an active community on Discord, where members enjoy hanging out, you could find numerous invitations for collaborations and partnerships in web3.
That's part of the reason why some of the blue-chip NFTs that were worth 60 ETH, like BAYC for example, are now going for less than 16 ETH. Many people want liquidity now, and they are getting out.
That means that right now NFT floor prices are down—and many great and promising collections are ripe for sweeping.
Last two years when the situation was bad for crypto, for example during the FTX storm, some NFTs experienced significant gains (prices rose), just days after crypto prices fell due.
One simple example from 2022 - Okay Bears were trading for 28 $SOL just before Solana fell from $31 to $18. Just seven days later, the floor price of Okay Bears surged to 48 $SOL.
This could give you an idea of a key strategy: buying NFTs when the value of their underlying cryptocurrency plummets can be a smart move. When the crypto's value decreases significantly, the NFTs can be acquired at lower prices, and then later sold once the price goes back to what it was before in fiat. In this particular example, if you bought one Okay Bear on the day Solana experienced a mini-crash, you'd pocket around $300 in profits a week later.
02. Get insider info
Joining NFT communities can be highly beneficial—by becoming a member of a specific NFT collection, you can gain access to useful alpha, get special perks, and meet other NFT owners.
Many communities offer raffles and whitelist giveaways, providing opportunities to mint new NFTs at a starting price.
Often, NFT collection creators and their core supporters are also crypto trading veterans that can teach you valuable tricks from their trading experience, just for the fact you're a loyal community member.
03. Diversify
Diversifying your blockchain portfolio is another strategy to consider. During times of market downturn, you can browse marketplaces for promising NFT collections that are currently on sale on many different chains—from SEI and Solana, to Ethereum, Polygon, and others.
By investing in a variety of NFTs, you can reduce your overall risk and increase your potential for returns. What's amazing about this moment now is that NFTs already went through a huge crypto and floor price depression, only the strongest collections survived and even fewer thrived.
It's easier to do your research right now to find out which collections show potential for growth. If they built stuff during the last fall's depression, imagine what they will be able to achieve during the present crypto bull run.
04. Get business opportunities
There are many business opportunities related to NFTs, such as starting a podcast or freelancing for NFT companies. Some individuals even sell their commercial rights for branding and marketing purposes.
Franklin, one of the most famous NFT holders was bragging in 2022 at one point how much he was making in leasing the commercial rights of his Bored Ape Yacht Club NFTs to businesses—it was in a five-figure number at that time. He talked about it in an interview on Nansen.
If you buy into a great community that is active on Discord, and they like to hang out with everyone there, you could find many invites for collabs and partnerships in web3.
There are many successful web3 consultants with emphasis on NFTs offering their services to many projects helping them with art, launch and making connections in the industry. The simple truth is the more you trade, the more experience you gain in making money that way and meeting more people who are always on the grind and can give you valuable insights.
05. Stake
Many NFT collections offer staking in their roadmaps, allowing you to earn rewards and crypto as a way of passive income while keeping the asset in your ownership.
Here's the strongest staking map currently:
Some staking arrangements can earn you tokens that you can spend inside their community ecosystem on updating your NFT art, and upgrading gaming items, thus upgrading the value of your NFT.
Primates on Solana are a great example of a staking model that allows you to dress your NFT differently almost every week, making it more attractive and desirable to the collectors.
Long-Term Value Appreciation of your asset is another great reason to stake. By participating in staking, NFT holders may contribute to the overall scarcity of the NFTs in circulation, potentially increasing their long-term value.
Other staking programs offer governance tokens or voting rights to participants. This allows holders to have a say in the project's decision-making processes, such as upgrades, proposals, or changes to the ecosystem.
In the end, you can always pull out and sell your NFT if you need liquidity when staking earned you a nice bag already.
06. Start an IRL business
Many companies have tailored and built real-life, profitable businesses around NFTs—the list includes toys, beverages, coffee shops, bars, hotels, packaged goods, foods and much more.
NFT owners can do the same, as the majority of collections give holders IP rights of the owned NFT.
For example, last year, Bicycle bought Bored Ape Yacht Club #1227, and partnered with designer AV Tones to incorporate beloved Bored Apes into their latest playing card collection. This release commemorates and celebrates the community of fellow Bored Ape NFT holders.
Jared Lang, a men's fashion brand, started a premium line of t-shirts featuring the New World Monkes NFT collection.
At the beginning of this year, Mutant Ape holder Seoh launched a chocolate brand called "Frens," featuring his MAYC #1926 as the brand stamp. His chocolates found a place in his BAYCs' restaurant "Bored Cuban", which can be bought right off the shelf proving once again a significant NFT community bond.
In fact, the Yuga Labs (creators of Bored Apes) ecosystem boasts "Made by Apes", a special platform built to verify, support, and amplify community-made BAYC and MAYC NFT brands and products. This platform allows BAYC and MAYC holders to request a license to use the Made by Apes logo with those projects.
NFTs? Think about them.
In conclusion, NFTs are quite an asset and a great parking for your cash with all these opportunities to earn more. When cryptocurrencies may experience significant fluctuations, NFTs have sometimes shown to be a profitable investment during bear markets. By keeping an eye on floor prices, joining communities, diversifying your portfolio, exploring business opportunities, and staking, you can take advantage of the potential gains of NFTs.
