10 Things to know about NFT before Investing

Alert!

Better to be alert before rather than regret later

What are NFTs?

NFTs, are a new type of cryptocurrency that is rapidly gaining popularity. NFTs are unique digital assets that can be used to represent anything from art to collectibles to in-game items.

Digitizing and monetizing

NFTs enable digital artists to genuinely own and sell their creations while also profiting financially.

Who is buying NFTs?

Not only high-end collectors can enjoy NFTs. Some tech-savvy customers buy them to show support for their preferred musicians, athletes, or public figures.

The pandemic, the Internet, and NFTs

NFTs isn't a new concept and have existed for a long time.

Their popularity has risen as a result of the success of Bitcoin and people spending more time online as a result of COVID-19.

How big is this market?

Bigger than you could imagine.

The NFT market increased by 299% in 2020, with sales exceeding $2 billion in the first quarter of 2021—and it shows no signs of slowing.

Is this the future of digital-asset investing?

NFTs are considered by some investors as a contemporary method for investing in fine art, but it is unclear how this will turn out.

Although the market for digital assets is expanding

Risky Business

NFTs carry risk just like any other investment. They lack regulation, and the craze that surrounds them could cause volatility.

NFTs aren’t readily exchangeable for cash, so liquidity is an issue.

Environmentally unfriendly

Although digital assets are paperless, they are sadly not environmentally friendly.

Energy is used extensively by the computers, storage, and security needed for NFTs.

Surprise! They’re not tax-free

Buying and selling NFTs are both taxable events.

NFTs are subject to capital gains tax at the top capital gains rate of 28 percent because they are regarded as collectibles.

Bubble trouble?

Some people are concerned that this market won't last since so many people are rushing to "get in early" and driving prices to excessively high levels.