Top NFT Stocks to Invest in NFT Industry
Lately, NFTs have become a hot topic. With major brands like Nike releasing NFT collections and artists like Beeple fetching US$69.3 million for a single piece, such eye-watering sums were bound to capture the attention of the masses.
But before you rush for quick gains, you might want to consider buying NFT stocks instead. In this article, we’ll define what NFT stocks are, discuss their advantages over buying NFT outright, list some of the top stocks to watch out for, and finally talk about the precautions new buyers should take before entering the market. the NFT stock market:
What are NFT shares?
These are shares of publicly traded companies that invest in NFTs and other innovations in the NFT ecosystem. An NFT stock can also be a stock in a private company that has invested in the NFT space.
Please keep in mind that the NFT space is nascent, so you will hardly find a publicly traded company that is entirely dedicated to NFTs. Most of the companies we will talk about for NFT stocks are already established in other sectors like technology, food and beverage, fashion, etc.
Why Choose NFT Stocks?
NFT stocks may be a better option for some enthusiasts entering the NFT space because:
· They are subject to a more concrete regulatory framework. When you directly own NFTs, often the issuers are anonymous. So if there are issues with copyright, insider trading, or even fraud, it can be harder to find someone to hold them accountable.
With NFT stocks, there are executives behind every transaction, and they must comply with strict rules set by the respective securities regulators in their region. In this sense, you have more legal recourse if the company in which you have invested does not keep its promises.
· NFT actions can be supported by greater expertise and resources. Buying NFTs on your own can be very expensive. Also, you may not have enough time and skills to conduct thorough research and always choose the next big NFT project.
These factors make it harder for you to win. But if you invest in an NFT stock, the company can spend a considerable amount of money on these challenges, giving you a better chance of profiting from NFTs.
· NFT actions are safer. As the NFT space becomes more lucrative, the number of scams and clever hacks are also increasing. So, as a retail investor without a massive cybersecurity budget, holding an NFT in a self-custody wallet can be riskier as its value increases.
Fortunately, companies holding NFTs can invest more in securing them, so on that note, it might be safer to have indirect exposure through NFT stocks.
· NFT stocks make it easy to diversify your NFT investment. You can have a finger in multiple NFT pies even with shares in a single company. Moreover, you can also buy different NFT stocks and benefit from the investment philosophies of different companies.
So if one company misses a good choice, another might spot it. Essentially, you are like an investor who buys an index rather than one or two companies in that index. This increases the chances of profit because if one NFT investment underperforms, others might excel and make up for that loss.
Main NFT Actions
Now that you have a good idea of what makes NFT stocks a solid investment option, let’s talk about some of the best NFT stocks to buy:
It’s hard to deny that eBay enjoys significant brand recognition in the e-commerce arena. Given eBay’s position, this gives them an edge over lesser-known competitors when it comes to acquiring customers in new markets.
Second, eBay’s involvement in the NFT industry is primarily as a marketplace provider. This means that they earn by facilitating trades rather than speculating on the future price of a specific NFT. eBay charges a flat 5% commission on the total sale amount.
So, as they see more customers trading and more NFTs selling for large amounts, they earn more. Third, eBay’s NFT Marketplace is one of the few that supports traditional payment methods, making it more convenient for those still interested in crypto payment dynamics.
Is arguably one of those NFT stocks with the most strong selling points. For starters, if you’re an NFT enthusiast interested in NFTs and not just supporting infrastructure, Draftkings might be your choice.
They already work with Autograph to offer collections signed by revered sports personalities such as Tom Brady. So not only will they attract genuine sports fans, but also other people who think the celebrity status of sports personalities is worth the investment.
And as if that weren’t enough, Draftkings has its roots in sports betting and sports fantasy contests, which means it already has products that are attracting plenty of customers. And if they somehow find a way to merge them with NFTs, creating new competitions with collectibles as prizes, they’ll rack up a lot of money.
But if you’re the more pragmatic type who likes products with simple utility, Draftkings also has a marketplace that facilitates peer-to-peer NFT trading.
Coinbase is one of the leading crypto exchanges in the United States, with over 8.8 million monthly active users. After launching the beta version of their NFT marketplace in April 2022, the platform recorded 900 transactions with a sales volume of USD 210,000.
Coinbase NFT sales volume reached $668,668 after two weeks, attributed to 1,287 active users. While the current market downturn has caused many people to exit the crypto industry, Coinbase is still one of the top three crypto exchanges by trading volume in the world.
Data shows that once the worst is over, this company will be perfectly positioned to attract more NFT buyers from its existing pool of crypto traders and new users. It should also be noted that the Ethereum-based Coinbase NFT will allow people to mint NFTs and has partnerships with major NFT collections in the pipeline.
Cloudflare is another particularly attractive NFT stock due to its foundation in technology. This company manages a content delivery network and secures several web and application resources, processing an average of 32 million HTTP requests per second.
The company has already capitalized on this by creating an intersection between its servers and the NFT world. They allow you to create an NFT on Ethereum to represent video or other content available through its Cloudflare Stream offering.
NFT technology changes the way ownership is digitally verified and the enforcement of owner rights. One of the common ideas was that whenever a song, video, or other piece of art is sold, the original owner can get a portion of the profit. Now Cloudflare could achieve the same for streaming.
This e-commerce platform allows people to get partial ownership of artworks, mostly from Asia. From paintings to jewelry and more, investors and collectors can buy and sell without the counterfeiting and price manipulation common in these markets.
Takung Art has only recently launched its NFT Marketplace and also intends to provide consulting services to other companies looking to venture into NFT. Currently, the stock is in sharp decline, which scares more than one. But depending on your perspective, this could be the perfect opportunity to “get in the game,” unlike most larger NFT stocks which are already very expensive.
Fun with dolphins
Dolphin Entertainment is already advantaged in the NFT space due to its marketing prowess. This is encapsulated by affiliates like The Door, 42West, and Shore Fire Media. Coupled with its recent partnership with FTX, the title becomes more interesting.
These two have launched an NFT market mainly aimed at well-known sports and entertainment brands. Dolphin Entertainment is also working on NFT projects with Hall of Fame Resort and Entertainment.
Other Notable NFT Actions
Many other respected brands have ventured into NFTs in one way or another, including Nike, McDonalds, Heineken, Playboy, and more. You can also check out Oriental Culture Holdings, Funko, CurrencyWorks, Hasbro, and the Defiance NFT Exchange-Traded Fund (ETF) for exposure to the NFT industry.
Before choosing NFT stocks to invest in, do the same things you would do for common stocks:
Know whether or not the company pays dividends
Analyze the performance of the stock over the past few years, especially during market declines
With respect to NFT-specific due diligence:
· Find out which NFT creators the company partners with or which NFTs they buy (yes, humans run businesses, so they’re not immune to FOMO and “hopium”). Remember that big companies often get it wrong when venturing into new spaces.
· Keep track of ownership and partnerships of the NFT part of the business. You don’t want to wake up one day wondering why your NFT stock isn’t rising only to find that they sold their NFT-related assets a while ago or hold minor shares of them.
How to Invest in NFT Stocks
Buying shares at Robinhood
1. Do research and create a list of NFT actions with your preferences
2. Browse various online trading platforms and find out what NFT stocks they have
3. Select one or more who have the NFT stocks you are interested in and open an account with them
4. Perform necessary Know-Your-Customer steps and other verification processes
5. Deposit funds into your trading account and buy shares of the NFT stocks you like
Investing in companies is already tricky enough and even more so if they are embarking on new activities. Don’t always stick to the big names. Many use NFTs as a gimmick to endear themselves to young customers. This means that they probably won’t develop their NFT wing much.
Try to split your money between established brands and a few outsiders who seem very passionate. Small businesses might surprise you. If you feel ready to buy some NFT stock, sign up with Robinhood and start filling your bag.