Three Reasons to Consider Adding NFTs to Your Portfolio

Over the last year or so, we've heard a lot about NFTs, or Non Fungible Tokens. They’ve gained attention for being something relatively simple - digital assets - that have been sold for prices reaching the multi-million dollar range. It’s all a bit mind boggling, until it’s broken down.

While NFTs and cryptocurrencies are both digital assets, their similarities stop with the term “non-fungible.” Cryptocurrencies, like dollar bills or other physical currencies, are fungible, meaning that they can be interchanged. You can go to the bank with five one-dollar bills and exchange them for one five dollar bill, and so on. Non-fungible tokens, on the other hand, are like baseball cards: their value fluctuates based on how rare the NFT is, how many people want it, and how much they’re willing to pay. The token part? It’s basically a unit of data stored on blockchain, which certifies its status as unique and real, similar to the way Sothebys will provide a certificate of authenticity if you were to purchase a work of art at an auction.

Now let’s get to the fun part. You’ve seen artists and creators selling NFTs for millions, and investors fetching even larger sums. So, should you invest in NFTs? Let’s explore three solid reasons to consider adding NFTs to your portfolio.

1. You’re an investor with a high risk tolerance. If you already know that you have a high risk tolerance, and you’re willing to take the risk on a relatively new and unconventional asset, NFTs are fair game. While some investors have reaped massive returns on resales, the NFT market remains unpredictable. For instance, Beanie Babies once held ridiculous price tags, and now they’re basically worth nothing. In a thread on Twitter, litecoin founder Charlie Lee said the ability to duplicate the underlying asset negates the value of owning the NFT. What does this boil down to? If you’re willing to take the risk on loss, you have everything in the world to gain.

2. NTFs bring autonomy back to artists and creators. For ages, artists have relied on middlemen - galleries and dealers - for the sale of their work. Even successful artists have struggled with the fact that these middlemen generally take over 50% of what the artist’s work is sold for. In the future, if that work is resold, the artist sees none of the resale value. Other problems in the art world (fraudulent behaviors like money laundering, forgeries, etc.) also pose a financial and ethical problem for artists, and the industry in general. But if an artist chooses to mint their work as an NFT, not only do they retain 100% of the sales value, they also have the ability to collect royalties, meaning that if and when the work is resold, the artist will continue to benefit from the increase in value. By buying NFTs, you’re putting money directly in the pockets of artists.

3. Resale Value and Security. This is probably the biggest incentive for anyone interested in getting into NFTs. In addition to the fact that the certification of NFTs offers a higher level of security, the right NFT has the potential to gain a huge return in profits once resold. It’s like buying any physical object that has the potential to increase in value — it’s all about supply and demand.

So, now that you know a bit more about a few of the reasons to add NFTs to your portfolio, that’s where Octonano comes in. Our international network contains experts in NFT marketing, creation, and minting, as well as talented artists. If you’re ready to start your journey into the world of NFTs, there’s no better place to start than by consulting with our team. What are you waiting for?