Investing in NFT Digital Collectibles

 Learn What Digital Collectibles Are And How You Can Invest In Them Yourself

The collectibles market exploded in 2020 as many sought nostalgia or sought new interests deep in the COVID-19 pandemic. At the same time, cryptocurrency was moving into the mainstream. Many companies have tried to ride the coat in both directions by producing digital collectibles using blockchain technology.

The result was a surge in NFTs, or Non-Fungible Tokens, that allow digital products to become collectibles in limited quantities. If you want to learn more about digital collectibles, how to invest in them, and the most important NFT holdings you can buy, keep reading.

What Are Digital Collectibles?

Digital collectibles are a unique or limited version of a virtual item. There is usually a visual element such as digital art, a video, or a digital trading card. In theory, anything represented by 1 and 0 could be like digital music recordings.

Digital collectibles use blockchain technology to create non-fungible tokens that allow distribution and conversion in ownership. In other words, digital collectibles cannot be copied like normal data on your computer, but one owner can easily transfer ownership to someone else. As a result, collectors can ensure that their digital art remains rare and set conditions for transfer or use.

How To Invest In a Digital Collection?

Digital collectibles can be purchased directly from the company you created or from NFT marketplaces, where collectors can buy and sell them.

If you buy directly from the company that produces collectibles, such as NBA Top Shot or DraftKings Market (NYSE: DKNG), you may be able to pay for items using a credit card. They'll keep the possessions for you in the custody portfolio. If you want to sell them, you can do this through their markets.

However, the wider digital collectible market requires you to use cryptocurrency in the transaction. You can find items in an NFT market such as OpenSea, SuperRare or Rarible. The cryptocurrency you need is usually selected through the market, but most use Ethereum blockchain, so you'll need Ether (CRYPTO: ETH).

You'll also need your NFT portfolio, such as Metamask, to make the transaction. Convert the required cryptocurrency to your wallet, connect the wallet to the market using the browser extension, and then select the NFT you want to buy.

The digital collectibles market is very volatile. The value of the collectibles is only as much as someone wants to pay for them. All collectibles, not just digital collectibles, can turn from hot to not overnight.

Therefore, if you buy a digital set based solely on the idea that it will rise in value, it is better to be willing to keep it. The good news is that digital collectibles, unlike physical acquisitions, do not require you to store and maintain them. There is no risk of destroying digital collectibles. As a result, the cost of ownership is practically zero.

In addition, the cost of selling digital collectibles is usually much lower than selling physical holdings. The only possible fee is market commission. Therefore, weak investment is not as bad in the digital world as in the physical world of collectibles.

Top NFT  Digital Collectibles

Thousands of collectable NFT projects are underway, not to mention one-off creations from artists and celebrities. Here are some things that deserve your attention:

CryptoPunks

CryptoPunks was created in 2017 by Larva Labs and features 10,000 unique pixelated images. The project is one of NFT's oldest holdings. Paintings with rare features brought in millions of dollars in prices.

CryptoPunks is the closest thing you'll find to blue-chip art in the world of the digital collection. As one of the oldest NFT projects of its kind, tokens should be able to retain their value better than other collectibles. However, they will not offer the possibility of estimating the value of new projects.

It is worth paying attention to CryptoPunks' recent sales for a measure of the NFT market in general.

NBA Top Shot

NBA Launched Top Shot in 2020 in collaboration with Dapper Labs, the company behind the popular blockchain game CryptoKitties. The project releases featured videos of players, such as somewhat digital sports cards. In fact, customers can buy "packages" of collectibles just as they buy card packages in the physical world. They can also purchase individual cards from the market through their website.

NBA Top Shot is an early example of digital-analog for physical collectibles. Investors should see how these acquisitions perform for physical sports card holdings to get an idea of how these types of projects are performing in exchange for traditional acquisitions.

What's Next For Digital Collectibles

Digital collectibles may have lasting value in our growing digital world. As augmented and virtual reality grows, digital collectibles may become more interactive or useful to users. Major technology companies are dumping billions of dollars into metaverse development and trying to push it into the mainstream for both companies and consumers. As digital environments become more natural, the value of digital collectibles can increase.

Remember that the market is very volatile and not every new project will be successful. Collectibles that were once elegant may become old-fashioned the next day, resulting in a drop in the value of the collection. Investors should pick out their digital holdings and just buy the things they really love.