Since 2009 and the creation of Bitcoin, cryptocurrencies have continued to grow in popularity globally. The global adoption of these digital assets has continued to rise as its value plummets. Crypto enthusiasts and users can now use cryptocurrencies like Bitcoin to pay for goods and services. However, that growth and popularity have remained progressive and have birthed many more cryptocurrencies. This is not strange, as non-Blockchain entities have grown interested in Blockchain and cryptocurrencies. One of such digital assets is Non-fungible tokens (NFTs). The NFT market is relatively small, but the popularity of NFTs has been on an upward trajectory recently. In this article, we will try to know if traders can earn profits from NFTs during a bear market.
What Are NFTs?
NFTs are unique and distinguishable cryptographic assets found on a Blockchain. An NFT can also be described as a non-interchangeable data unit and digital ledger usually found on a Blockchain. While cryptocurrencies are assets that can be used as a medium of exchange, NFTS are non-identical and uniquely different. NFTs cannot be traded or exchanged like cryptocurrencies. NFTs are very distinct, and the creation of each NFT represents physical assets like art pieces and real estate. The presence of NFTs on the Blockchain means that they do not require intermediaries in their transactions.
NFT creators and traders are afforded a smooth transaction process via Blockchain without third-party interference. NFTs are already making transactions seamless between users despite being a new market. NFTs data units are usually digital files, including videos, audio, and pictures. It is also worthy to note that, like regular cryptocurrencies, NFTs contain ownership details. Possession of ownership details makes it easy to identify and transfer ownership from one user to another quickly.
How Does NFT Work?
NFTs are digital assets like cryptocurrencies, but they differ slightly in characteristics. Like fiat money like USD, cryptocurrencies are fungible and can be traded or exchanged. This means that the value of one Bitcoin is the same everywhere, just as the value of a USD everywhere. However, for NFTs, that is not the case. NFTs are unique and unparallel, making it difficult to equate one value to another. Each token contains a unique and non-transferable property that cannot be shared or possessed by another. This is why the price, value, characteristics, and properties of one NFT can never be equal to another.
Surprisingly, despite being unique, NFTs are extensible. This means that one can combine two different NFTs to produce a third unique NFT. NFTs are primarily found in the ERC-721 format. The ERC-721 format is unique and was developed by the engineers of the ERC-20 smart contract. One of the most famous examples of NFTs is the cryptokitties, which was launched in November 2017. Cryptokitties were a digital representation of cats found on Ethereum Blockchain and valued in Ether. The project amassed more than $20 million in 3 weeks, as investors took a keen interest in the NFT project.
Why You Should Buy NFTs In Bear Market
NFTs are a unique form of cryptocurrencies and are also volatile assets. Volatility in this instance means that their prices are not the same at every given time. However, like cryptocurrencies in a bear market, crypto analysts advise that NFT should be purchased in a bear market. There is no doubt that bear markets are usually associated with fear of the future or the unknown. Cryptocurrencies like Bitcoin and Ethereum have entered the bear markets in the past years, which also follows bull run.
However, with NFTs, their value is known to plummet in a short period or in the nearest future. Fortunately, many NFTs have proven to exceed expectations after the bear market, with investors making huge returns on their assets. Alternatively, the value of NFTs has also continued to be on the rise as the burgeoning market continues to grow. This trend implies that the best time for investors to get into NFTs is to invest in a bear market. The low risk and prices associated with a bear market implies that, should the asset collapse, losses will be low.
Top Three Marketplace To Buy NFT
NFTs continue to attract potential and existing crypto investors as the unique token market continues to boom. However, listed below are three of the best places where NFTs can be purchased:
Founded by Devin Finzer and Alex Atallah, Opensea is a top place for NFT users to conduct their business. The Ethereum-based digital marketplace offers buyers an unfathomable collection list, providing creators with huge revenues. Currently boasting over 80 million NFTs and accepting more than 150 different tokens, Opensea is a global NFT giant. The digital marketplace boasts high trading volumes compared to others, and provides consumers with access to create and trade freely. Since it is built on the Ethereum chain, its number one currency is Ether.
Founded by investor-billionaire Sam Bankman-Fried, FTX remains one of the world’s leading crypto exchanges. However, the Cross-Platform digital NFT marketplace of the Blockchain empire is currently making waves in the space. The marketplace allows users to create and mint their own NFTS, which can be sold or traded. The NFT marketplace is unique as users from Ethereum and Solana Blockchain can successfully trade their NFTs. Creators are the biggest beneficiaries of FTX, as their NFTs can reach a wider audience.
Also built on Ethereum Blockchain, Rarible remains one of the leading pioneers of the NFT space. Its marketplace was one of the first globally and offers users easy minting and trading opportunities. The digital marketplace boasts a user-friendly interface and is known to incorporate even novices into the world of NFTs. Crypto analysts usually advise NFT newbies to trade on Raribles, as their bespoke service makes it easy to understand NFTs. Unfortunately, one of the limitations of Rarible is that it can only complete transactions with the rarible token (RARI).
NFTs are unique crypto tokens and assets with no equal value and are found on the Blockchain. The uniqueness and unparallel nature of the digital assets make it impossible to equate one value to another. They are better purchased in a bear market, as their value is known to rise in the future. Opensea, FTX, and Rariblles are the best digital marketplaces to trade NFTs.