In the cryptocurrency exchange ecosystem, the demand for Non-fungible tokens (NFTs) is rising rapidly. For instance, with the boom of NFT sales globally, there is also an increment in the business and job prospects for many professions. Furthermore, various businesses are looking to explore the world of Metaverse (a digital space created by Meta Inc.) and need NFTs to develop and induce customers to follow them online.
To resolve such a phenomenon, let’s explore the ways to assess the value of NFTs.
How to find the worth of an NFT?
Truly speaking, there is no guide or manual to ascertain the worth of an NFT. The methods one uses to examine traditional investment vehicles or private companies like stocks are not considered for NFTs. Thus, the factors which can help you determine the worth of an NFT are as follows:
By analysing the NFT’s historical values and understanding their pattern, you can determine their appreciation value. If there is no value appreciation shown by the NFT, the price of that particular NFT will be affected relatively. The NFT value monitor plays an important role in ascertaining this.
Tracking the price of the NFT through an NFT value monitor helps in perceiving its value. For example, blockchain analytics used by an NFT Tracker helps in the comprehension of several data points associated with an NFT. Hence, to find the worth of NFT, crypto enthusiasts must evaluate the trends in the blockchain.
Another way to understand the usefulness of an NFT comes from its actual implementation in the digital or real world. The value of some NFTs is so much greater than the collector’s items as they might be employed in virtual places, avatars or games.
This characteristic of NFTs offers them instant value, which leads to the gradual rise in fame of the NFT project. When the number of participants rises over time in a decentralised game, most of them would have to be prepared to endow a premium amount for getting the one-of-a-kind card.
Liquidity is one of the factors which can aid in evaluating the value of an NFT. Asset liquidity is a common issue which is faced by numerous NFTs. Why? It is because NFTs are not deemed as liquid assets. They cannot be sold straight away and turned into cash as there are many factors which come into play and govern such trading decisions.
Past ownership. Value appreciation, utility and brand are some of the important characteristics which aid in ascertaining the liquidity of an NFT. The visibility of NFTs among the customers is increased by these elements. If there is a high demand for a certain brand and the consumer is aware of NFTs, only then the NFTs can be sold seamlessly.
There can be a reduction in the purchasing rate of NFT if they are catered for use only by a particular consumer group. This causes a downfall in the asset’s liquidity. But, the liquidity for the asset can rise if that asset can attract a small but passionate group of people who consistently pursue it.
Scarce and non-replaceable
Another way to measure the worth of an NFT is to discover how complex and scarce is to own a particular NFT. For example, the effects an NFT would have on a video game. Due to their inherent value in which NFT’s owner has the blockchain evidence of ownership, people rush towards such NFTs. This leads to a sense of difference and elucidates the premium value of an NFT.
An NFT is truly worth purchasing if they are compatible with the above-mentioned methods and can attract the interest of customers. In addition, if you are thinking to buy NFTs in India, you can directly buy them from one of the most trusted NFT marketplace platforms i.e., WazirX.