To buy or not to buy

To buy or not to buy an NFT is a difficult decision because there is no thumb rule. At present it is highly speculative, and hence a very personal choice. The price of an NFT is entirely demand-driven and depends on how badly people want to buy it. A promising NFT might just fizzle out, or a seemingly dumb one might end up as a cash cow just because it caught someone’s fancy! You buy an NFT hoping someone will want to buy it for a greater price in the secondary market—something that you have no control over. So, here are a few tips from experts on how to buy NFTs: • Since it is a new trend with not much historic data, invest a small amount initially and see how it goes. • Buy only what you can afford to lose. • Make sure it offers some value to you—either emotional satisfaction or physical utility. You can buy it if you like the art or the artist, or believe in the cause behind it. You can buy it if it is something you really wish to own—a collectible close to your heart. That way, you do not feel the loss even if it does not sell in the secondary market! • Do not buy NFTs just for the fear of losing out, or because you were invited to a drop. • If you cannot get proper information about the art and the artist, avoid putting money in it. • Look out for the good NFTs from social media, NFT marketplaces, and NFT drop calendars. Do your due diligence each and every time, because no two NFTs are the same—remember they are non-fungible. “As not all stocks are same, so is the case for NFTs as well, and it is dangerous to bucket them all under one umbrella when thinking about investments. Just like we do research on which stocks or even property offers the potential of appreciation, we should be looking at individual NFTs in the same light. Each project has been created with a different set of utility surrounding it, being just for the artistic nature, access to some kind of associated utility, or even managing loyalty programs with multitude of variations,” explains Menon.