Looking for the best NFT asset for a profitable investment is a challenge for even the most experienced investors.
As more collections are released, and as more people begin to invest in NFTs, it’s difficult to cut through the noise.
And that noise is only getting louder!
In 2021, NFTs, or non-fungible tokens, became a $40 billion industry.
Now in 2022, some of the largest crypto trading platforms, including Coinbase and Kraken, are releasing their own NFT marketplaces.
With an increasing number of collections, wallets, and tools, it’s helpful to have a way of making sense of the data so you can make a sound investment.
To make this investment process easier, we’re breaking down the best tools to get you started investing in NFTs.
The Key To Investing In NFTs
A quick definition of NFTs: NFTs are digital assets representing real-world objects — art, real estate, in-game items, animals — that are bought and sold online.
Because NFTs have a digital signature which contains information about the artist as well as specific copyright information, each one is unique. This signature can’t be changed and can’t be stolen.
The value of these NFTs varies on a number of factors, including the rarity of the NFT, the number of NFTs in the collection, and the purpose of the community around the NFT.
Generally speaking, the rarer an NFT is, the more valuable it can be. Finding out just how rare an NFT is, both within its own collection and within the broader NFT universe, isn’t always apparent.
The key to investing in NFTs, then, is being able to identify which ones will become more valuable over time, giving you the highest chance of being able to resell it later on.
The Risks & Rewards of NFT Investing
As with any financial investment, investing in NFTs comes with its own risks and rewards.
For those who want to mint NFTs to support the communities they’re a part of or the artists they adore, the long-term investment is more about the continued success of these projects. The rewards of NFT investing for creators is about having an additional source of income.
It gives creators a way to connect directly to their fans — or to a completely new audience — without the need for intermediaries like agents or managers. And for those supporters who get in on projects early, there’s a chance to sell once the project is more established and make a nice profit.
While those rewards can be nice for both the creator and the community, there are risks, too. Most often, those risks are related to a lack of information.
For those who aren’t familiar with blockchain technology, cryptocurrency, or involved in NFT communities, that can lead to mistakes, missed opportunities, or lost investments.
Without understanding the market or the communities supporting a project, getting out the money you’ve invested in may be complicated. And in a sector that’s still not regulated, there can be little options for recourse if something goes wrong.
As the market is still young, there are notable spikes and dips which lead to attention-grabbing headlines about huge profits as well as big losses.
Given the newness of the market and its currently evolving state, you should only be investing what you can afford to lose.
Finding the Best NFTs
With the number of NFT collections being released, the large communities, and the endless online discourse, finding the best NFTs to invest in isn’t just about the availability of information, it’s about having access to the right information.
Like any other investment, doing your own research is a fundamental part of NFT investing.
However, doing your own research depends on the time and resources you have available. There’s a difference between a full-time financial analyst who has hours to leaf through white papers and get involved in Discord communities and a busy parent just getting started in NFTs while juggling multiple full-time responsibilities.
Consider for a moment the number of points worth researching for each potential NFT:
- How rare the NFT is in comparison with its collection
- Its current price compared to its past sale prices
- Its price compared to its collection
- The background of the creator or the community
- How involved or engaged the community is on Twitter and on Discord
- Which marketplaces the NFTs are listed on
Some of these points can be understood at a glance. Others require joining Discord or following conversations on Twitter. And still others require deeper trend analysis.
With the right NFT tools for investing, though, that decision becomes easier. So which tool or tools should you go to for your next NFT?
5 Easy-to-Use NFT Tools for Investors
NFT tools are designed to help us evaluate and review NFTs before investing in them.
By applying your own filters in addition to industry-standard ones, you can more easily find projects within your budget, with the proper credentials, and with a promising future.
Below we’ve got 5 tools for new NFT investors (or time-crunched NFT investors) that incorporate information like NFT rarity, NFT news, and trading history, along with their own proprietary offers to help you do your due diligence.
Given that tools in the NFT space often have a few overlapping features, we’ve highlighted three of the most interesting features of each tool to help you understand their strengths.
Browse investments like an art gallery with rarity.tools
What new NFT Investors need to know about rarity.tools: Rarity.tools is one of the NFT space’s most accessible tools — and its most useful. Most commonly used with projects in the generative art space, rarity.tools does more than highlight the unique visual characteristics of a project.
By blending real-time data and rarity rankings with top-notch aesthetics, Rarity.Tools makes the often overwhelming amount of data available in the NFT space much more manageable.
3 rarity.tools features to try:
- Easily understand an individual NFT’s rarity with its rarity score
- Rank art in terms of rarity, volume in ETH, average price, available collections on the market, number of owners, sales, and more
- Track upcoming NFT mints
Track all of your crypto holdings with DappRadar
What new NFT Investors need to know about DappRadar: While most of our recommendations will come exclusively from the NFT space, we want to include the free-to-use DappRadar as a way to get exposure to the whole decentralized universe. With information about crypto, NFTs, games, DeFi, and more, DappRadar’s tools and features make the space accessible and comprehensive for new and experienced NFT investors.
For new NFT investors, DappRadar has a number of essential resources, including free wallet tracking, a blog on NFT investing, and news about a range of decentralized subjects.
3 DappRadar features to try:
- Discover new projects in the NFT space and beyond with ranking list of all existing Decentralized Applications
- Monitor and track your acquired assets with the intuitive portfolio tracker
- Browse celebrity investors and whale wallets
Bid, buy, and trade NFTs with OpenSea
What new NFT Investors need to know about OpenSea: As one of the main platforms for trading NFTs, OpenSea is also packed with information that will help investors make informed decisions.
With the ability to rank NFT collections by volume, floor price, and real-time performance in categories including art, collectibles, domain names, music, photography, sports, trading cards, and more.
3 OpenSea features to try:
- Buy NFTs that are listed for sale or bid on NFTs that you’re interested in but aren’t listed for sale
- Browse multiple blockchains, including Ethereum, Polygon, Klayton, and soon, Solana
- See collection page for real-time performance and history and sort by trait rarity
Keep your analytical cool with icy.tools
What new NFT Investors need to know about Icy.Tools: A data-driven tool with flexible breakdowns of real-time floor prices, volume, and a number of other rankings, icy.tools empowers users to stay on top of the ever-changing NFT market with an easy-to-use interface.
Once you master the beginning features, you can subscribe to the premium version for a more in-depth analysis, market charts, and custom alerts.
3 icy.tools features to try:
- Sort through data with finetooth control, including what’s trending over the last minute, 5 minutes, and 15 minutes (with a premium membership)
- Discover projects as they are minting, along with the number of mints and first mint date
- Enjoy custom alerts — SMS, Discord, Twitter, and others — for the projects and wallets you follow
Perform due diligence with Nansen.AI
What new NFT Investors need to know about Nansen.AI: As one of the first-launched NFT tools, Nansen has data of the activity of over 100 million Ethereum wallets. Powered by an algorithm that promises to “surface the signal in blockchain data,” Nansen.AI provides insights that allow you to see where funds are moving to, identify new projects and tokens, and trace transactions.
With Machine Learning-based price estimations, too, you can also get an edge on the market. Being one of the most powerful tools on the market does come with a price as Nansen.AI offers four levels of plans based on how much access you need.
Nansen.AI features to try:
- Level up from an interested investor to an experienced one with Nansen’s wide range of guides, reports, blogs, and research
- Dive deeper with data on multiple chains, including Arbitrum, Avalanche, Polygon, Solana, and more
- Stay on top of gas prices with Nansen.AI’s Ethereum gas tracker
How Dakko.ai makes NFT investing better
We hope we’ve given you a solid understanding of the available NFT investing tools. As you continue to learn, you’ll find other ways to use the tools and marketplaces to help you make solid, data-backed investment decisions.
One of the ways to make those decisions as quickly and as confidently as possible will be with Dakko, our AI-powered NFT curator.
With inputs from historical trends, top investors, and recent collection activity, Dakko generates an easy-to-understand score to give investors like you more confidence to make informed investment decisions.
For more information on Dakko’s development, including to join our Private Access List, we encourage you to visit our just-launched website and join our Discord.
