If you are looking for a way to invest in NFTs, then NFT stocks may be your play. But what are NFT stocks, and should you buy them?
Disclaimer: Please always consult an investment professional to understand the investment risks - any ideas and strategies shared should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.
If you are looking for a way to invest in NFTs, then NFT stocks may be your play. For those who are intrigued by the potential of the NFT, but aren't quite ready to directly invest by buying NFTs, NFT stocks represent a way to get a start in the market. And for those who already own an NFT collection, NFT stocks may be a good way to ensure that your NFT portfolio continues to hold value.
But like any investment, NFT stocks carry risk. The crypto market is volatile, and as yet unregulated (by design). This means that NFTs themselves can fluctuate in value. NFT stocks can fluctuate as well.
So before we look at how to invest in NFT stocks, let’s quickly examine what an NFT stock is.
What is an NFT stock?
Generally speaking, an NFT stock is a share of a publicly traded company that is involved in the NFT business. For this reason, you may see them referred to as NFT-related stocks.
To date, there are very few publicly-traded companies that are EXCLUSIVELY involved in NFTs. Instead, if you are investing in NFT stocks, you may be buying shares of a company like Coinbase that trades in cryptocurrencies and digital wallets. As a result, the value of your NFT stock will rise and fall as the company’s whole financial picture does.
This can make it tricky to determine which are the best NFT stocks, or which look like the “safest” investment.
Should you buy NFT stocks?
This is a very complicated question. Much depends on your stock portfolio, your appetite for risk, and your faith in the company you are investing in. The breadth of companies that also are involved with NFTs suggests that you should be able to find investment opportunities that excite you and also support the NFT market.
Remember that nearly all NFT stocks are companies that do other things too. Funko Inc is a viral lifestyle brand that sells NFTs as a collectible product. Toy maker Mattel is a publicly traded company. As Business2Community puts it, “Since June 2021, Mattel has been auctioning off NFTs that are linked to its popular toy brands.”
Freetrade.io suggests you may want to invest in Mcdonald's. Yes, that Mcdonald's.
They explain “So McDonald’s isn’t leveraging NFTs as a revenue generator, for now. It’s using them to generate enthusiasm over a once-retired menu item. And whether or not they actually brought customers through the doors, NFTs at the very least generated a fair bit of brouhaha and McNFT headlines.”
How do I buy NFT Stocks?
When you buy an NFT, you’ll do that on an NFT platform or an NFT marketplace. You’ll select the digital assets you wish to buy, pay the price using blockchain technology, and receive your nonfungible token (a bit like a permanent and sellable bill of sale. The artist or brand that sold it will receive compensation).
Buying an NFT stock is managed just like the purchase of any stock. You’ll use a broker or trading platform and make your purchase through the New York Stock Exchange (NYSE) or NASDAQ. Unlike NFTs and cryptocurrencies, these transactions are regulated by the Securities Exchange Commission, and subject to the same rules as any publicly traded and held stock.
With your purchase of an NFT stock comes a share of ownership in the company, which may involve shareholders' meetings, dividends, and a proportionate share of control over the decisions made by the organization.
But we wonder if, in addition to considering which NFT stocks to buy, it may be wise to examine direct investment in NFTs as well. As the market fluctuates, NFT creators and brands are getting smarter than ever about how to build value into your purchase. And many traditional businesses are building NFTs into their business models.
From exclusive membership perks for NFT owners to proportionate input into the direction of the company or project, NFT owners are getting much more than digital art. And many NFTs cost far less than the millions of dollars that make headlines. That’s why we think that NFTs will change the world, and why you might want to get on board.
If you want to learn more about how brands increase brand loyalty and monetize their audience, Register for our NFT Masterclass today.