The coronavirus pandemic has transitioned society into the digital world. Digital transactions are gradually becoming the new norm for commerce. And the appearance of NFTs is a confirmation of what the future holds. NFTs, or non-fungible tokens, are the newest high-potential trend in the cryptocurrency market, with sales increasing exponentially in the recent months.
Despite the NFT market having reached more than $200 million in the first two months of 2021, the market for NFT is still small compared to that of cryptocurrencies. Worse still, many people do not know how to take advantage of this trend. Therefore, Jurgen Cautreels, Marketing Pro and NFT expert, will be sharing what every investor needs to know about NFTs.
For the sake of the beginners who might be reading, how can anyone invest in NFTs?
NFTs are considered stores of value, and it’ll be unwise not to be involved in its dynamics. There are exchange platforms for investment.
For example, Opensea, the largest crypto market, includes collectibles, game items, and a series of virtual products. There, Items are bought through smart contracts.
Jurgen Cautreels, how do you identify high-potential NFT projects?
The general rule in trading NFT projects is to buy low and sell high. But, most times, it quite hard to figure out the items that would soar high in value.
However, from experience, high potential NFTs are predicted by analyzing the developers, the industry, the community, and the artist’s brand. I’ll strongly advice that you first have a good knowledge about any item before acquiring it.
Awesome! Jurgen Cautreels, is there any tax associated with NFT investments?
NFTs are not tax-free. If you desire to buy and sell NFTs, you should be ready to get taxed. The main reason is that NFTs are collectibles and are taxed at the maximum capital-gains rate of 28%.
Investors should expect tax while transacting NFTs with cryptocurrency, changing cryptocurrency into US dollars, and selling an NFT for a different NFT.
What ways can content creators invest in NFTs?
There are a lot of artists who have become frustrated due to their inability to generate monetary value for their online creations. With the advent of NFTs, digital artists can own and sell their works while enjoying the financial benefits.
Alternatively, Cloudflare, a cloud service security provider, allows video creators to link their content to NFT. The idea is to restrict access to the video to only those with NFT for monetization.
Jurgen, how do you keep track of NFTs?
There are pages and information sources in this sector. These resources help a trained eye to identify which projects are worth investing in.
Nonfungible, the broadest database, shows the record of sale and purchase activities. It is necessary to invest time into familiarizing yourself with the market and the traded non-expendable assets on the platform.
Reiterating, immerse your mind with the trends and sales-related data.