The NFT world has seen a steep increase in attention for the past year. This caused many NFT’s to be sold in millions of dollars and made the news many times. Most famous artist called Beeple (Mike Winkelmann) has sold his art collection for 69 million dollars. It wasn’t his first art, and he sold many before that, however this big sale made him one of the highest earning artists alive. From one Doge picture sold for 4 million dollars to the first tweet by the founder of Twitter going for 3+ million dollars, there have been a lot of NFT’s that went for high prices.
This made people question, what makes any NFT worth so much? Usually the answer is the rarity and popularity. Popularity is not something that could easily be backed by data (albeit social media helps in that regard). However, rarity could definitely be put into data, because there are a limited number of certain traits in any NFT and you could see how many exist, the rarer is usually the better.
What you'll learn 👉
How to check value of NFT?
There are few tools that you could use to check on the value of any NFT, or at least rarity of it. Places like Nansen Research has NFT paradise, or Howrare.is has Solana covered. There is also a great website called rarity.tools, they are the leader in the market for checking each NFT’s rarity.
It is a website that allows you to check the rarity of any NFT collection and NFT. From CryptoPunks to Bored Ape Yacht Club to any other famous collection. Basically if you want to see how rare an NFT is and accordingly also how much it is worth as well. This way if anyone wants to invest into any NFT, all they have to do is check on it at rarity.tools and that way you learn how rare and valuable it is.
Of course a rarity of any NFT doesn’t guarantee a high price, but it is often correlated. This causes everyone to check the rarity and find similarly rare NFT to see prices. There are about 300 collections on the website right now and that allows people to have good data to start their NFT journey without making big mistakes.
NFT Community
Second most important thing after rarity is the community. What makes a good NFT collection a great one? It is the community, if people support what you are doing and take it to a viral level, then it will become very popular. CryptoPunks doesn’t inherently have a value, but when community praises and popularizes it, then suddenly it actually has a great value. You should start off with the usuals, telegram groups, twitter, facebook and all other social media that they are on.
If they have a good number and the users do seem real instead of bought, that is a good sign. After all there are many projects with 500k followers with only 100 real ones, we do not want that. Social media and the community is the most important power any project could have. Not only people will cling into their NFT but they will also do marketing for you everywhere they go as well.
You should also check the amount of NFT that is minted or will be minted as well. This gives projects credibility. For example CryptoKitties initially started with limited numbers, but they started to distribute more and more for special reasons and we know how it ended up. CryptoPunks only has 10.000 NFT minted and says it will not mint any more, same goes for Bored Ape Yacht Club as well. So the sweet spot to give enough mixture without overcrowding seems to be 10.000 NFT in a collection.
Holding NFT in one address
Another important part of the searching process is to learn how many NFT you could hold in one address. Sometimes you could have 5, sometimes it is 20 but there is nearly always a limit to the amount of them you can fit inside one address.
We all know that people can use multiple addresses, however it is unlikely that someone would control thousands of addresses to corner the market. Which gives these NFT’s a rarer situation where people could own only a limited amount of them. Obviously the less you can own, the more people will own at least one, and this means people need to be careful on what they pick. Since there is a limited amount, nobody wants to waste it on a common one.
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Checking top NFT buyers
If you want to make sure that your decisions are good, or if you want to confirm what makes any NFT value, then you can check top NFT buyers. When you go to opensea (an NFT marketplace), you will see big players in the NFT market. There you can see what they are searching for a proper NFT. It allows you to take a look at the same things that they look at. This way you will know what to search for yourself as well.
Of course you may or may not afford to buy the same things, but you will be able to understand the logic of a big player and that could allow you to shape your strategy.
Another place to check in order to see popularity and what people think is Twitter. As we all know Twitter is usually the place people talk about crypto. There are other places as well but the most common social media that we use is Twitter (and reddit is a good second). If you follow influencers in the NFT world, you get to see what they get into, and what they look for.
This will help you either find good rare NFT’s in older collections, or find newer and fresh collections that may turn out to be great. Do not forget, cryptopunks first came out in 2017, it has been a long and thorny road but they are sold for millions of dollars now. If you know who to check in the NFT world, not only will they help you with sharing, but you could also tweet with other people under the original tweet, that way it brings the NFT community together.
Eventually you will realize you chat with the same person under many different influencers tweets. It bonds communities together, and allows them to share their ideas about NFT’s easily.
Social Media
Another way to see the project’s hype and the community much better is going into their social media yourself. Go into their discord and telegram channels and participate. This way you get to see the group of people who are interested in the same NFT as you.
This will allow you to calculate the level of interest and reasoning behind it. This will help you put a valuation for it in your mind. Of course you can’t do that without comparative data, so you need to do it for all projects, and see what one is worth and what the other should worth accordingly.
Chatting with people is also another way to find other projects as well, while talking about one NFT, another NFT will pop up in the chat. This way you can learn more about brand new collections and games. It will allow you to be an early bird in newer stuff and earn bigger returns if they are good.
Youtubers
There are always good Youtubers in the NFT world that you could follow as well. Youtubers like BitBoy Crypto, Crypto Stache, The Bitcoin Express, VoskCoin and many other crypto youtubers created videos on NFT as well. So you should always stay up to date with these crypto youtubers to see what is the current hype in the NFT world.
They do not only share about big known places, but also end up sharing new stuff on the rise as well. That way if you check videos and click the alert button, then you get to watch videos on new stuff as early as possible. This will gain you an advantage over other investors because being early means you get to buy it for cheap before it becomes popular.
What makes any NFT worth so much?
Usually, the answer is rarity and popularity. Popularity is not something that could easily be backed by data (albeit social media helps in that regard). However, rarity could definitely be put into data, because there are a limited number of certain traits in any NFT and you could see how many exist, the rarer is usually the better.
There are a few tools that you could use to check on the value of any NFT, or at least the rarity of it. Places like Nansen Research has NFT paradise, or Howrare.is has Solana covered. There is also a great website called rarity.tools, they are the leader in the market for checking each NFT’s rarity.
It is a website that allows you to check the rarity of any NFT collection. From CryptoPunks to Bored Ape Yacht Club to any other famous collection. Basically, if you want to see how rare an NFT is and accordingly also how much it is worth as well. This way if anyone wants to invest into any NFT, all they have to do is check on it at rarity.tools, and that way you learn how rare and valuable it is.
Of course, a rarity of any NFT doesn’t guarantee a high price, but it is often correlated. This causes everyone to check the rarity and find similarly rare NFT to see prices. There are about 300 collections on the website right now and that allows people to have good data to start their NFT journey without making big mistakes.
What makes a good NFT collection a great one?
It is the community, if people support what you are doing and take it to a viral level, then it will become very popular. CryptoPunks doesn’t inherently have a value, but when the community praises and popularizes it, then suddenly it actually has a great value.
You should start off with the usuals, telegram groups, Twitter, Facebook, and all other social media that they are on. If they have a good number and the users do seem real instead of bought, that is a good sign. After all, there are many projects with 500k followers with only 100 real ones, we do not want that. Social media and the community is the most important power any project could have. Not only people will cling to their NFT but they will also do marketing for you everywhere they go as well.
You should also check the amount of NFT that is minted or will be minted as well. This gives projects credibility. For example, CryptoKitties initially started with limited numbers, but they started to distribute more and more for special reasons and we know how it ended up.
CryptoPunks only has 10.000 NFT minted and says it will not mint anymore, the same goes for Bored Ape Yacht Club as well. So the sweet spot to give enough mixture without overcrowding seems to be 10.000 NFT in a collection.
How many NFT you can hold in one address?
Sometimes you could have 5, sometimes it is 20 but there is nearly always a limit to the amount of them you can fit inside one address. We all know that people can use multiple addresses, however, it is unlikely that someone would control thousands of addresses to corner the market. This gives that NFT’s a rarer situation where people could own only a limited amount of them.
Obviously the less you can own, the more people will own at least one, and this means people need to be careful about what they pick. Since there is a limited amount, nobody wants to waste it on a common one.
What makes NFT value?
If you want to confirm what makes any NFT value, then you can check top NFT buyers. When you go to Opensea (an NFT marketplace), you will see big players in the NFT market. There you can see what they are searching for a proper NFT.
It allows you to take a look at the same things that they look at. This way you will know what to search for yourself as well. Of course, you may or may not afford to buy the same things, but you will be able to understand the logic of a big player and that could allow you to shape your strategy.
Another place to check in order to see the popularity and what people think is Twitter. As we all know Twitter is usually the place people talk about crypto. There are other places as well but the most common social media that we use is Twitter (and Reddit is a good second). If you follow influencers in the NFT world, you get to see what they get into, and what they look for.
This will help you either find good rare NFT’s in older collections or find newer and fresh collections that may turn out to be great. Do not forget, cryptopunks first came out in 2017, it has been a long and thorny road but they are sold for millions of dollars now.
If you know who to check in the NFT world, not only will they help you with sharing, but you could also tweet with other people under the original tweet, that way it brings the NFT community together. Eventually, you will realize you chat with the same person under many different influencers’ tweets. It bonds communities together and allows them to share their ideas about NFT’s easily.
Conclusion
In the end, nobody could guarantee that the NFT you bought will go up in price. It is a matter of popularity, hype, going viral, rarity and many other stuff that gets together. Sometimes some projects stay still for years and then suddenly become very valuable. Sometimes certain projects are worth so much, and then become less valuable.
Crypto world is volatile if nothing else, this is why nothing is certain in crypto and certainly in NFT. However if you manage to find collections early on, find the very rare ones, and it goes viral, there is a good chance you could make a great return out of it.
This requires countless hours of research to find the most rare and ready to rocket NFT’s, which is a very difficult thing to do, and not a profit yielding thing most of the time. However when you do it once, and get that great return, it is most certain that you will not be able to stop ever again, not so easily at least.
