How to Invest in NFTs and a Few NFT Investment Strategies

NFT stands for non-fungible token. That just means data stored with blockchain technology that's not fungible — or not able to be replaced with another item like it. The unique nature of NFTs is what makes them a potential investment item, but how does someone go about investing in NFTs? Start with the short guide below.

1. Pick an NFT

NFTs can be created with anything made up of data. Digital art is one popular option, and NFTs can be digital drawings, photographs, or even videos. Other options include music clips, digital items in video gaming worlds, and even screenshots of Tweets or other online content.

2. Research the Relevant Marketplace

NFTs are sold via marketplaces, and each one requires a specific type of payment. Payment is typically made via crypto currency, and the buyer must own enough of the required crypto currency to make the purchase. This may require a buyer to open a new crypto wallet or fund an existing wallet with the right type of currency. Once that's done, the right amount of crypto currency can be transferred to purchase the desired NFT.

3. Bid On or Buy the NFT

Some NFTs can be purchased outright. Others are listed via auction marketplaces and buyers must bid and win before they can buy and own the NFT.

4. Have an NFT Investment Strategy

Buying NFTs willy-nilly is a poor strategy. Investors should consider what type of NFTs may continue to gain value as they own them. Digital art is a good example, especially if the pieces are from rising artists. Valuable game items that could become rare and desired by players are another example of NFTs that could gain value in the future.

At this point, NFTs are relatively new and the market is volatile. The NFTs that gain value in the future may surprise everyone, but buyers should think ahead the best they can and buy NFTs that make sense to them.