NFT FAQ: How to Flip NFTs and Make Money from Digital Assets
Some collectors are buying NFTs to flip them for a higher price. This is a short guide on how they are doing it.
Ever wonder how people flip NFTs like pancakes? There are NFT traders who have different strategies on flipping NFTs, based on the trading principle of buying low, selling high. Flipping NFTs refers to the act of buying an NFT at its lowest price and selling it at a higher price for profit!
Before buying your first NFT, there are things that need to be taken into consideration. These are what the utility of the NFTs are, who the founder of the NFT project is, how active the community participates, who the project is associated with, how appealing the artstyle appears, and what the floor price and trade volume of the project are.
Take Note of Utility
Utility is what the NFT can do for the owner. By simply owning the NFT, does it incentivize them through discounts or promos? Or perhaps, will the owner gain access to events like concerts or art galleries? Basically, the owner must assess if they will enjoy real life perks for holding on to these NFTs. These utilities can be found on the whitepaper of the project.
Know or Research the Team Behind the Project
Knowing who is behind the project also adds value to the NFT. If the owner is a known artist or an influential personality, it can draw potential buyers. These founders could be doxxed (identified) or un-doxxed (anonymous). The amount of impact and following the founders have on social media sites is a factor to take note of before investing in an NFT.
Learn More About the Project’s Community
The NFT community can dictate the hype of a project. These communities can be found on official sites linked to the NFT project, like Twitter or Discord. On Twitter, popular community activities include: using the NFT art as profile pictures, retweeting tweets of the project, and talking about the project through Twitter Spaces.
It is also important to be aware of bots that generate generic messages. On Discord, one can observe how the NFT team interacts with the community then assess how organic and authentic the conversations are. Most announcements are posted on Discord—they can be used to know when the private minting or whitelisting will be and how to get a whitelist spot for the project.
Major industries and celebrities can be a factor in the value of the NFT. Some can add to the hype and the utility of the NFT.
Art can be a factor to those who base their purchases on the aesthetics of the piece, especially if the art style is identifiable to a known artist. This is more of a personal preference for potential buyers.
Floor price is basically the lowest price in the collection that can determine if the project is affordable to mint and be sold at a higher price. The trade volume shows how many sales were made for a period of time which determines the trend of the project: whether the sales is going higher, lower, or flat.
There are strategies shared online on how NFT flippers find projects. However, it is best to take those kinds of content with a grain of salt and consider them as guides; always do further research on other strategies to optimize one’s NFT experience.
Purchase Whitelist/Discounted NFTs
Purchasing whitelists or discounted NFTs requires diligent research and observation from any interested buyer. Each project has a different approach to distributing whitelist spots to participants. Some of these include inviting more people into the community, entering raffle contests, or interacting with the Discord server until a milestone or rank is achieved. During presales, most NFT projects give discounts to whitelist holders. Hence, this would give the flipper more potential profit after the presale.
Take Advantage of the Hype
Hype can be used to gather more NFT enthusiasts into a project and because of it, this can be an opportunity to get the floor price and sell it to a higher value to gain profit.
Learn Instinctive Buying
Just like other skills that sharpen as they are practiced, NFT flipping becomes an “instinct” rather than an “impulse” when done repeatedly. Seasoned NFT flippers develop a gut feel based on how they see the movement of a project. This practice is a higher risk and requires a lot of research on the project before impulsively buying NFTs.
Engage with the Community
Building a network of NFT enthusiasts can give you an edge of getting ahead at upcoming projects and easily identify possible buyers that are interested with certain utilities and genre of artwork.
Trading NFTs is one of the best ways to profit in web3 and thus requires hours of research and awareness around what it is and what the space thinks of it. Interacting with the NFT community and being part of it can also help in learning more of what projects can help flippers to find profitable projects and lessen the risks in trading.
This article is published on BitPinas: NFT FAQ: How to Flip NFTs and Make Money from Digital Assets
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.
