Risk is a constant in all investments, more so for an industry as volatile as cryptocurrency.
NFTs, which are digital objects on the blockchain, are no exception. With so many collections, finding a stable NFT to invest in is difficult.
Experienced collectors prefer to start at the top with blue-chip NFTs. So, what is a blue-chip NFT, and where can you find one?
What Is a Blue-Chip NFT?
In traditional finance, securities from companies that have established themselves as a leader in the industry are known as blue-chip stocks.
You can spot one by its high market cap and company reputation. Similarly, blue-chip NFTs are non-fungible token projects that rank high on the best NFT marketplaces.
You can spot one by the NFT floor price, originating company, use case, and creator’s popularity.
Experienced NFT collectors or investors prefer blue-chip NFTs mainly because of their stability and profitability.
Investors are more likely to buy into an NFT project that has already made a name for itself, as this often indicates legitimacy.
Investing in well-known projects reduces the risk of falling victim to scam sales.
Secondly, selling NFTs from these projects is easier since collectors look first at those collections, therefore the demand is higher.
1. Rarity
NFTs are known for being unique digital artifacts, and blue-chip NFTs are the rarest. First, the blue-chip NFT collections have a limited amount, usually less than 10,000.
Most, if not all, of the NFTs are created with distinctive traits, with some assets in the collection being more unique (therefore rarer) than others.
2. Community Demand
Even with cryptocurrencies, the biggest driving force in the industry is a strong and active community.
The mass of people raising awareness of an NFT collection can do wonders for the performance, even better if the community consists of famous names and celebrity endorsements.
Just like Elon was a big driving force for Dogecoin, Justin Bieber and Snoop Dogg made the Bored Ape Yacht Club NFTs more popular.
3. Historical Value
NFTs do not become blue-chip NFTs on their own. Being attached to noteworthy historical moments helps in raising their value.
For example, the Crypto Punks NFTs are the premier NFT project.
They were NFTs before most of the world started paying attention to this market.
4. Utility
Like tokens, utility is also a key factor for NFTs. NFT projects with the most explicit and practical utilities will likely be favored in sales and auctions.
Some examples of NFT utility include…
- Event tickets.
- Access to early releases (e.g. for games).
- Access to physical products.
- Loyalty rewards.
- Access to airdrops.
Users want to invest in NFTs that bring them some profit and utility, or, at the very least, are not the products of scams.
Popular Blue-Chip NFT Collections and Where to Buy Them
As is often the case in the crypto industry, certain projects gain a huge amount of notoriety, resulting in a huge boost in their tokens’ value.
The NFT market is no exception to this rule, with many collections being categorized as blue-chip.
How to Invest in Blue-Chip NFTs
There are no magic formulas for investing in NFTs, much less blue-chip NFTs.
It’s crucial to keep in mind that you are always exposed to risk, no matter how promising an NFT may seem.
Here are a few things to note before investing in these NFTs:
Educating yourself is the first guideline for investing in traditional finance and cryptocurrency.
A savvy investor gets all relevant market information. You must keep up with all the market’s current trends and technological developments.
When you can predict which trends will last, you can decide which NFTs to invest in.
Second, a crypto investor must be well-versed in research. It’s one thing to recognize general trends and quite another to comprehend a specific collection.
Before you invest in any blue-chip NFT, you should research the founders, the founding project, and the utility.
Something that determines blue-chip NFTs is their rarity. You can spot a rare NFT before it rises to blue-chip status.
So, if you cannot purchase one NFT from the bigger collections, you may be able to find your own.
The first thing to consider before investing is financial planning. Blue-chip NFTs, because of their prestige, cost a lot of money.
So, it’s a bad idea to blow all your money on an asset that is so volatile.
Start by deciding how much your income you can spend on investment, and opt for projects that fit within your budget.
Finally, you should be willing to adjust your stance.
The market, as mentioned earlier, is very volatile.
If the state of the market is not encouraging, you should probably stay out of it.
You can also consider HODLing (Holding On for Dear Life), so long as you deem it appropriate.
You can also get a potential blue-chip NFT by participating in an NFT Drop. Some Ethereum users got Crypto Punks NFTs during the release and sold for thousands of dollars almost 4 years later.
Are Blue-Chip NFTs a Good Investment?
Blue-chip NFTs can be a good investment for those willing to take the risk. There is as much potential for high returns as the possibility of losing money.
Investors should carefully consider the factors of specific blue-chip collections and the risks involved before investing.
Sorce : https://www.makeuseof.com/what-are-blue-chip-nfts-where-can-you-find-one/
