Investing in art can provide many benefits to your portfolio, including hedging against inflation and accruing value on an asset over time. However, investing in the traditional art market can be inaccessible and highly expensive for new investors. The crypto world presents lucrative opportunities for investors interested in cryptocurrency and art collectors interested in new digital art assets. The NFT marketplace has made digital art a highly lucrative commodity in the crypto world. Investors interested in investing in the art market should consider NFTs and the many artistic mediums NFTs can use.
What Are NFTs, And Why Invest In Them?
Non-fungible tokens or NFTs are encrypted digital assets housed on a blockchain network that indicate ownership of a digital or real-world asset. When you purchase an NFT, you buy the rights to the content, and legally you are the owner of that asset. Anyone can invest in NFTs, making them a highly accessible form of secured ownership. The security and sustainability of a blockchain are essential for investors hoping to make long-term gains on their NFT investments. NFTs, like cryptocurrencies in general, can help hedge your investments against the inflation of fiat money. Cryptocurrencies fluctuate based on factors other than those that impact our traditional economic systems; for example, the value of crypto hardly ever changes in response to stock market fluctuations.
NFTs And The Digital Art Market
NFTs were first used on the Ethereum blockchain, where their value to the digital art community was first discovered. NFTs allow digital artists to verify the originality of their artworks and create digital scarcity within the digital art market. Before using NFTs, digital artists had little control over their intellectual property once it was uploaded to the web. Now, minting an artwork into an NFT can ensure that the creator is credited, and the piece’s provenance is never questioned. The artist can even opt to receive royalty payments each time their NFT is resold.
NFTs can be anything from art, videos, music, etc., making the NFT market highly diverse and lucrative. Many celebrities have endorsed the NFT market, even creating their own NFT collections. Snoop Dogg, Justin Bieber, and Steve Aoki are just a few famous NFT collectors who have made significant investments in the NFT marketplace. In 2020, NFT sales reached $95 million; in 2021, it skyrocketed to over $25 billion in sales. As more and more industries, creators, and collectors continue to invest in NFTs, the market will continue to grow and offer opportunities for crypto holders.
How To Invest In NFTs
Following a crypto platform such as FTX can help you stay ahead of the curve and learn everything you need to know about how to buy and sell NFTs. Doing ample research before investing can help you safeguard your investments and make smart purchasing decisions. You will need to select the cryptocurrency and NFT marketplace you want to invest in.
The NFT marketplace has to accept the cryptocurrency you choose to fund your digital wallet. Once you’ve selected your exchange and marketplace, you can fund your digital wallet through a crypto app and begin bidding on and purchasing NFTs. Your NFTs will be stored on the blockchain of the cryptocurrency you hold, and you can access it through your digital wallet until you wish to sell it.
Investing in NFTs can be a highly lucrative endeavor if done correctly. If you’re a collector, do plenty of market research to decide which exchange is best for you and which NFT collections will most likely benefit your financial goals. If you’re an artist, you can use NFTs to safeguard your intellectual property and access a growing marketplace to sell your work.