The best thing about the crypto industry is that it’s ever-changing. Bitcoin and Ethereum dominate the cryptocurrency marketplace, but they aren’t the only financial products attracting crypto enthusiasts navigating the internet.
Non-fungible tokens (NFTs) are attracting the attention of each crypto fan and investor. NFTs have boomed since 2021. Moreover, they are establishing new records this year. OpenSea saw monthly volume crossing $5 billion early this year.
Also, LooksRare witnessed million-dollar transactions during its initial month of launch. That indicates a surge in NFT popularity and investors interested in the assets as a lucrative investment.
Assessing NFT Values
NFTs have sold at eccentric prices recently. Also, we have seen them not getting close to those prices during presales. The puzzle most investors encounter makes it vital to judge the token’s real value before buying. Are there indicators to ensure simple work?
For now, there are no indicators to gauge NFT values. You can use matrices when measuring a private company’s shares or value. However, NFTs are new asset classes yet to gain such matrices. That’s a fact for sellers and buyers.
Most buyers use instincts and depend on guesswork to measure NFT value. Also, sellers aren’t sure about the money they’ll make after selling the assets they hold.
Similar to other artwork, NFT prices rely on time perception. Neither sellers nor buyers have control over this perception. Nevertheless, you can use various factors to measure NFT values and predicts the ‘real’ values of your NFT or intention to purchase.
Factors Affecting NFT Value
Utility
You can determine NFT utility through its application within the digital or physical world. The digital and physical worlds are closing in, and NFTs proving valuable in both worlds will attain higher values. Though NFTs are unique, that isn’t the only facet giving them value.
Users can apply them as building resources or in gaming clothes. Also, they can use them as power-ups for spells or characters.
Rarity
Rare things are priceless in the physical and digital world, and that’s the case with the NFT space. That’s why NFTs by celebrities have higher prices than those created by other individuals.
Community Size
Potential users and buyers on the marketplace drive NFT prices. That’s why the community size remains crucial. NFT projects with large communities mean more individuals looking to purchase.
Disclaimer: NFTs and Cryptocurrencies are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by our authors (namely Business Voices content) and the views expressed in these types of posts do not reflect the views of this website. Please read our full disclaimer here.
