NFT investment, short-term profitable and long-term profitable
Three categories of NFT
From an investor's point of view, it can be grouped into three categories. Art NFT, Utility NFT, Community NFT.
Then, which NFT category should we invest in?
From a long-term and short-term perspective, I think of different preferences for each NFT category defined above. Depending on the goal and period you want to make a profit, you can refer to the information below and invest.
Types that will bring good profits in the short term.
First, from a short-term perspective, the investment preference ranking is as follows.
Utility NFT > Community NFT > Art NFT
In the short term, (2) Utility NFT is the most preferred because it is easy to judge the value through growth indicators of specific games or apps. If you find a crypto game or metabus that is highly likely to grow or is rapidly growing compared to other investors, it is likely to lead to a high return on investment.
(3) Community NFT also has indicators for short-term investment. Indicators of the growth of the community, which are key intangible assets, include — a. Twitter, discord, and other sns channel growth rates, b. unique owner count, c. community created contents, etc. The way you invest in NFT, which symbolizes the community by tracking the growth of the community, is also easy to invest in the short term due to the presence of objective indicators.
At this point, you may know why (1) Art NFT is the last in short-term investment assets. It is that there is no intangible asset that can determine the value, making it difficult to identify works that are likely to rise. Because aesthetic values involve a lot of subjectivity. Of course, indirect valuation through artist reputation or market demand is possible, but in the end, it is difficult to determine projects that will rise in the short term because fundamental assets are artworks.
Types that will bring good profits in the long run.
On the other hand, from a long-term perspective, the ranking is reversed.
Art NFT > Community NFT > Utility NFT
From a long-term perspective, (2) Utility NFT investment has many risks. The reason is that utility NFTs move their value according to the rise and fall of subordinated games or applications. Games are a particularly difficult industry to maintain long-term success.
Furthermore, game studios currently in the crypto industry are not mainstream game studios. If a large game studio with powerful IP and manpower enters the utility NFT market, many existing utility NFTs are likely to fall behind in competition.
(3)Community NFT is a similar reason to the above. The community also has ups and downs, and in particular, the existing closed NFT community is considered to have a higher risk of collapse due to the difficulty of introducing new members. However, community NFTs are relatively low in risk compared to utility NFTs because they are not subordinate to specific games, applications, or public blockchains, and the same community can be implemented in multiple games or blockchains.
From a long-term perspective, (1) Art NFT is superior to the above two product groups. Art works are given historical value over time, and the artist's death stops supplying additional products forever, leading to an increase in value, and can be implemented in all applications or public blockchains.
Existing metabus services (ex. sandbox, CryptoVoxel, etc.) are different services, but they are scrambling to implement the NFT gallery service for artworks. This means that the works in my Ethereum wallet can be displayed on any app. Since the value of the work is not linked to a single service or community, it is difficult for artworks that have already gained popularity to collapse easily. (Of course, the liquidity is the lowest, so you have to wait and wait.)
Conclusion
The same investment strategy cannot be applied to all NFTs, and different investment strategies must be implemented for each classification. It may be a good idea to endure works of art that you really want to take to your grave. But if I take the utility NFT to the grave, wouldn't it be a piece of tissue?
Utilities and community NFT investments require active investments. Game growth indicators and community growth indicators are constantly monitored, and when bad signals come out, boldness is needed to sell them. On the other hand, art NFTs will need robustness that is not shaken by countless price fluctuations.