Non-fungible tokens have grown in popularity starting in early 2021 with some tokens going for ridiculously high prices.
However, NFTs have more uses than you think. In this guide, you’ll learn why anyone may want to buy an NFT and what value these unique digital tokens bring to the table.
Plus, if you reside in Australia, we include a neat guide on how to start investing in non-fungible tokens.
Why buy NFT?
Different investors will typically have various reasons for making investment decisions, but for NFTs here are the most common ones:
NFTs have turned out to be highly speculative, especially in 2021 when some brand new tokens soared to hundreds of thousands of dollars in a few days. Therefore, most other NFT buyers got attracted to the possibility of buying the next big hit.
NFTs are easy to buy and sell. Popular tokens are highly liquid because many investors want to have them. Some buyers are in the market to flip NFTs where they buy cheap and sell higher in relatively short durations.
A popular use for NFTs is displaying them on social media profiles to identify with like-minded investors. Displaying a BAYC (Bord Ape Yacht Club) ape NFT shows that you not only own one but you subscribe to the ideals of the BAYC community and are a member of this exclusive virtual club.
Store of value
Given that some of these non-fungible assets are fetching high figures in the marketplace, some investors have found a use of them which is storing them for future use.
This way, they are grouped in the same category as some of the highly sought-after paintings or classic cars. A few crypto lending platforms are now accepting NFTs as collateral for loans of digital assets.
Many NFTs copyrighted represent digital art, but there is a growing niche of in-game assets. These tokens can be used in virtual environments such as virtual land and video games.
These are just some of the common reasons for investing in NFTs. Non-fungible token Investors are a diverse group of individuals and institutions with various motivations.
Is NFT popular in Australia?
Non-fungible tokens may not be as popular in Australia as they are in other countries. However, this new asset class is growing in popularity.
According to a recent survey of 1,000 Australians performed by Finder.com in September 2021, about 4.6 of the respondents admitted to owning some NFTs.
Finder polled more than 20,000 participants across 20 countries, and Australia came out 15th.
However, the poll also revealed that 7.1% of Aussies were planning on becoming NFT investors in the near future, which could push Australia up in the rankings.
Best NFTs to buy
There are millions of non-fungible tokens in the marketplace but most of these are probably junk with no value to serious investors. If you’re in the market for some worthwhile NFTs, here are some of the best to consider:
CryptoPunks: Created in 2017 by Larva Labs, these are some of the earliest NFTs. There are 10,000 punks with a floor price of about $200,000. A floor price is the lowest going price for a typical token. Like the other tokens on this list, CryptoPunks are valuable because of their provenance and scarcity.
Bored Ape Yacht Club: BAYC ape NFTs are a popular social media avatar. Only 10,000 of these rare tokens were created in 2021 by Yuga Labs. The floor price for these apes is currently around $250,000.
Mutant Ape Yacht Club: MAYC apes are a follow-up by the same organization behind BAYC. These tokens were airdropped to initial holders of Bored Apes. There are 20,000 MAYC apes in existence with a floor price of about $50,000.
Evidently, they are not as valuable as the Bored Apes but they are still valuable investments.
Learn more: Can Opensea Use Solana
How to buy NFT in Australia?
Australia is a pro-crypto economy. Investors don’t have hard time buying NFTs. The easiest way to do that in Australia is to use a public open NFT marketplace such as OpenSea. There are only three requirements to buying NFTs through OpenSea:
- A web3 wallet that is supported by OpenSea;
- Ethereum (ETH) tokens; and
- An internet connection.
The most recommended web3 wallet to use with OpenSea is MetaMask which exists as a web and mobile wallet.
However, you can only use the NFT marketplace on the web. Ether tokens will be useful when buying the tokens on the platform.
Once you have all the requirements ready, visit OpenSea.com and connect your wallet then visit the marketplace and buy some non-fungible tokens.
Learn more: NFT Tokens In South Africa (Full Guide)
NFTs are becoming increasingly popular as an excellent hedge against conventional investment assets such as stocks and precious metals.
They’re complex to understand and use, so we highly recommend investing the time to study them before taking your hard-earned cash and splashing it on a Bored Ape.