With billions of dollars already spent on NFTs, the NFT space has grown to become a really big part of the development and adoption of blockchain technology.
The NFT space has attracted people around the world who have invested a lot into different NFT projects they like and find interesting and worth their money.
NFTs now cut across different industries, some of which are the gaming industry, creative art industry, music industry, fashion industry a couple more.
Investing in NFTs can be sometimes overwhelming because of the number of NFT projects out there which makes it hard to pick the right NFT to invest in.
Assessing the value of an NFT is very important when it comes to investing in NFTs.
How to assess the value of your NFTs
We've seen thousands and millions of dollars worth of cryptocurrency spent on some NFTs. This sometimes makes me wonder why these NFTs are worth so much.
Here are some things to take note of when assessing the value of an NFT.
Rarity: NFTs are unique digital assets. But in an NFT project, some NFTs have more rare features than others. These features that these NFT have influenced the value of the NFTs because a lot of people who invest in NFTs prefer to buy rare digital assets.
Utility: Some NFT projects provide the holders of NFTs from the project exclusive access to special features which might include an exclusive membership to a club, exclusive access to events, and a lot more. And NFTs that are used in games give the players who own the in-game NFTs cool features and access to special things in the game.
The utilities got from an NFT also influence the value of the NFT.
Ownership History: The ownership history of an NFT is important when you're trying to assess the value of an NFT. There are some huge names and brands when it comes to investing in NFTs.
So when an NFT is bought from a highly known artist or influencer in the NFT space, it also influences how much that NFT will be valued.
Liquidity Premium: Observing how easily and fast an NFT sells in the marketplace is very important when you're trying to value an NFT. If an NFT has a low engagement and low liquidity then it won't be highly valued. So, the higher the liquidity, the higher the value.
Closing Thoughts
The NFT space is booming and a lot of people will love to invest in it but only a small number of people will invest in highly valued NFTs. Therefore taking note of these things that influence the value of an NFT will help you when you are ready to invest in NFTs.
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