This is not investment advice and should be used for informational purposes only.
If you are an avid investor, chances are you have either been following the growth trajectory of NFTs over the last couple of years or at least got hooked to the headlines made by artist Michael Winkelmann (aka Beeple) in 2021 when he sold his NFT for a jaw-dropping $69 million!
This new digital asset class of non-fungible token or NFT investments has swept the world of art, celebrities, music, collectibles, tweets, games, and heck, even memes – thanks to its authenticity, immutability, individuality, and sense of ownership.
So, why is the NFT market exploding right now and why should you invest in it?
1. Exclusivity
In an online world where assets can be easily shared and “reposted”, the NFT system chases exclusivity, and that’s what drives people towards buying them. Because who didn’t find owning the rarest Pokémon cards back in childhood days cool? Or a book signed by the author himself? Similarly, there exists a pair of highly-priced authentic sneakers called CryptoKicks by Nike in the NFT world.
The record of ownership of an NFT is meticulously kept on the blockchain. Once you own an in-demand asset that is truly original and one-of-a-kind, a huge value can be attached to it. And you know that ought to mint money!
2. Security
Just because it doesn’t exist in the physical world, NFTs don’t automatically become insecure. Users can easily utilize the unique signature feature of the NFTs which makes piracy difficult. It can create digital signatures on each transaction and even encrypted messages.
The foolproof operation of the blockchain market also protects the work from data loss. So, you can trade NFTs safely and reliably.
3. Convenience
The thought that investments are only for the wealthy is now a thing of the past. Through the concept of fractionalized NFTs, NFT owners can share the ownership with others, making it possible for multiple people to own high-value assets by paying a smaller sum of money.
NFT gives you access to the entire international online community where you can source, buy, and own rare, one-off assets from anywhere on the planet – no physical logistics involved.
4. Physically Indestructible
NFTs are physically invincible. They are free from the destructive power of natural calamities like floods, storms, earthquakes, cyclones, etc., unlike their high-priced physical counterparts. Therefore, investing in NFTs is a safer bet.
They are also less prone to theft if you keep your digital presence protected.
5. Alternate Investment
There’s a set of potential returns as well as risks that comes with every investment made. Depending on your risk appetite, if you think that NFTs, crypto, and blockchain can help you diversify your portfolio along with the conventional stocks, bonds, and mutual funds; then go for it. NFTs make for a good alternative investment – the returns could be high so enjoy them, but don’t rely on a single investment to fund your entire retirement.
6. Decentralization
Each piece of NFT artwork is owned by a single person, so every time the piece passes, the owner will receive a commission. Also, the NFT market involves direct interaction between sellers and buyers. Therefore, there is no need for a centralized third party or the extra cost related to these parties. This exclusive feature is very advantageous to investors.
7. Utility
This is where the opportunities are as vast as the ocean and the limits sky high!
Imagine getting your favorite action figures in the form of NFT collectibles that never break, but are possession of high value to you. Or what about getting VIP NFT coupons that come with certain privileges when you buy a concert ticket?
This one is for travel bugs – what if your hotel gave you NFT collectibles that unlocked special room upgrades or services?
These are just an eyedropper’s worth of potential utility taken from the vast ocean we just spoke about. There can be many more such use cases of NFTs.
Digital assets are becoming a huge industry in itself. The suggestion is to stick through the rule of DYOR – Do your own research, and see what makes sense for your investment portfolio. If you feel comfortable taking a reasonable risk with an NFT, then go for one. It can be a legitimate part of any healthy, well-diversified portfolio as long as you are not over-leveraged on them.
Author Bio:
Akanksha Malik is a content creator & digital strategist at Mesha – India’s largest investing club & online community where the world’s best investors gather to share ideas, discover fellow investors, invest in NFTs & crypto, and compete in challenges for real money. She develops content to share her knowledge and insights helping her readers stay updated with the latest in fintech & investments, as well as cryptocurrency trends and upcoming NFT opportunities. Apart from being passionate about her work, Akanksha loves exploring architectural sites and different local dishes during her travels.
