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Is NFT worth to invest?

Most of the NFTs on the market at present are art collections, such as artworks, sports trading cards and other valuable items. Even an online post, as long as it can be stored on a digital ledger can basically become NFT products. 

Art is abstract. Although a work of art is owned by a person, its value comes from the recognition of it by others. Like the Mona Lisa, everyone knows this artworks so its value is relatively high.

NFT makes this market different after it comes out.  Digital works make artworks more diversified, and it’s easier to let people know the artistic works. In addition, NFT can prevent forgery. Each NFT has its own unique verification so it can reduce doubts about preservation and transaction costs. Most people may think digital works on the Internet can be mass copied. However, NFT is built on the blockchain with  a chain of identifiable data blocks so each NFT just can be owned by a person.

What is the risk of NFT investment?

If you want to invest NFT as the target, you have to realize that NFT investment are with high volatility and the risk of copyright authenticity.

1. NFT is a market with extremely high volatility. Just like paintings and other physical artworks, the value of NFT is directly proportional to its market volume. It means that a product is hyped up, or occurs a negative news, both may make the NFT goes up and down in a short period. Therefore, you have to understand that NFTs are an investment market with volatility many times higher than Bitcoin market.

2. Doubts about the genuine or fake of NFT. There are many NFT’s public platforms. Although these platforms will do the first step pre-audit, you sometimes can hear that false copyright of NFTs happened. You’re better to choose the biggest and reliable NFT trading platform; meanwhile, you also have to review the merchant’s past NFT transaction records.   

Source : Binance

3. Liquidity of NFTs. Most artworks are with lower liquidity. NFT’s liquidity is much better than ordinary artworks. Due to works are not many and and speculators are a lot, there is no liquidity problem at present. However, if there are more and more NFTs works come out in the future, each item is unique. How to maintain the sufficient liquidity we still have to observe.

NFT is a new and high risk market. You must do good research before you start to invest in this market.