Voices in the back of my head were growing louder. I could hear the echoes of Dave Ramsey, my grandfather, and almost every other financially prudent person in my life. My hands were clamming up a little bit and I was second-guessing myself....a lot.
"Surely, this is a terrible idea!" I thought. I was prepared for this moment. I had done extensive research, read whitepapers, and mentally prepared myself. I needed to pull the trigger. Then I had different thoughts come to me. I thought of some surfer dude telling me "Just send it bro!" Then I thought of my uncle who convinced me to swing off a huge rope swing for the first time when I was just a kid. I sent it then, was I going to back out now?
A clear image of a boring CPA with high-waisted dockers sitting at his desk job doing menial tasks came to my head, I thought "Crap, I don't want to be that guy". Wayne Gretsky's advice then yelled through my head "You miss 100% of the shots you don't take." So I did it, I clicked that freaking button. I bought my first NFT back in December of 2021. I was excited but simultaneously filled with buyer's remorse for spending hundreds of dollars on a picture of a dog. Mixed emotions, sentimientos encontrados as they would say in Spanish. Now let me explain how buying that picture of a cartoon animal has led me on a path that has helped me make good trades, learn more about my risk tolerance, and make new connections.
So you probably want to know what happened to the picture of the dog right? I waited a few months and then I sold that thing for double what I bought it. I was pumped! It was my first success in NFT trading and it felt good to make money. This was that NFT. I bought it for around 1 SOL and sold it for over 3 SOL. That was roughly a $320 gain at the time! That was a great cash-on-cash return.
Now, if you think that I then proceeded to YOLO my entire net worth into NFTs and became a crypto millionaire, prepare to be disappointed. I ended up investing a few thousand dollars. I begin to be very interested in what are known as utility NFTs. I actually learned that some NFTs do have value beyond being art. I have invested in NFTs which are essentially a share of a company that operates on Web3 (a crypto network). Some of these companies provide services like access to their software and programming, others are art projects, some are video games, others simply grant access to their community or an expert, some run online shopping marketplaces, some act like hedge funds, and others run currency exchanges and generate money from fees (cryptocurrency exchanges) some are scams. I could go on and on! NFTs are cool because they allow you to invest in startups in a rapidly growing sector. This can lead to great returns, but also very bad ones as well!
My Experience with Trading NFTS
I have made better returns on my NFT investments than in any other sector
There is a lot of insider trading and scams
Most influential people in the space do not have your best interest at heart
Emotional trading will make you lose money, try to have a preset entry and exit point (I don't always do this and it has hurt me at times when I don't)
It is risky, do not allocate too much of your net worth to this sector like any other asset, and adjust for your risk tolerance. You need to be totally ok with the idea that you will lose all the money you invest, still, that doesn't mean you can't hope for good returns that is why we are all here.
I have made a lot of friends through Twitter and discord that have helped me learn and have shared advice with me.
It can be addicting to be on Twitter and discord all day, don't do it. Spending too much time online looking for "the next play" is the wrong play
I am comfortable with the amount that I have invested in NFTs and am looking to branch into other investments at this point. My NFTs that I do have actually pay me some passive income so I will reinvest that money. Before investing in NFTs I would make sure to understand what the NFT you are buying is, why it is valuable, and why you think its value will go up. It is the same as looking to invest in a company long-term. Would you invest in the leadership of that company? Is it profitable? Is it a smart investment?
With short-term NFT trading, it is much different, with the use of manipulation tactics, marketing, and social media hype some projects are obviously going to go up in price once they are released. If you are lucky enough to buy one of those NFTs at their mint (initial sell) at a lower price or gain access to a pre-sale (whitelist) that can be an easy way to profit as well. However, with the bear market conditions for crypto, this has also become harder and there are no free lunches in crypto. You have to risk it to take of the delicious and desirable fruit of 100x returns.
In my NFT investing, I have also had chances to take profits that I should have taken and cut losses that I should have cut. Usually, this occurred when I didn't have a set entry and exit point. At one point, I could have had a multi-thousand dollar profit on an NFT, and instead, it turned into a loss! Ignore crypto mantras of "HODL", "diamond hand", and "to the moon". Some of the very people saying this stuff are simultaneously looking to use you as their exit liquidity for any given NFT project. To summarize, pick a strategy and stick to it.
To conclude, I have had a good experience investing in NFTs. I have learned a lot about blockchain technology, met smart people, and learned more about investing principles. I hope you all go out there and learn as much as you can about a new technology or a new opportunity that interests you. Do thorough research, evaluate the best possible investment plan, and then decide if you want to go through with it or not. I went through with mine and it worked out great! Set goals, make plans to reach those goals, and execute. If it fails, try and try again. Have a great day and go outside! :)
Not financial advice. Please use great caution with any speculative investment.
