How to make money with NFTs

Have you heard of Beeple? A few months ago he was a nobody in the art scene. His most expensive piece of art made him $100. Fast forward to today and he’s selling pieces for over $69M placing him in the top 3 most valuable artists alive. What happened? And more importantly: How can you get a slice of the cake?

Understanding the NFT gold rush

The NFT goldrush happened. NFTs are essentially collectibles on the blockchain, mostly on Ethereum. When you buy an NFT you’re essentially buying an item with a serial number, there is only one of it with that exact number. That’s just how collector’s items work.

Are you wondering how you can make money in this gold rush?

The easy answer is to become an artist yourself. Too easy unfortunately. While beeple is forever a household name it’s unlikely you’ll become one too. NFT success stories are told big and bright in mass media. But the crowd has already arrived and many famous artists have rushed to the gold mine. It’s hard to predict which artists are going to make money in the long run.

Selling shovels in a gold rush

So who is profiting from this NFT gold rush besides a few select artists? The ones who make money consistently in a goldrush are the ones who sell shovels to the desperate driven by FOMO.

During a gold rush, sell shovels.

In this NFT gold rush the NFT marketplaces represent the shovels, for example OpenSea and Rarible. Starting a marketplace on your own is probably not something you can do over night. But you can participate in their success. You can simply invest in their platforms. Rarible for example has its own token RARI you can simply buy. This is an easy way to own part of the gold mine, or shovel factory if you will.

The NFT hype does not stop here though. More and more niches and use cases are discovered. While buying more established tokens like RARI is a relatively safe play there is also limited upside potential.

Own a stake of a gold mine

There are also new marketplace with unique concepts coming up which might have a much better risk/reward ratio. One of such challengers for a unique NFT use case is MerchDAO.

MerchDAO will launch their token on March 27 through Poolz. Their initial market cap will be around 600k. Let’s compare that to RARI.

RARI’s market cap is 80M vs. MerchDAO‘s’ 0.6M initial market cap. Let’s assume a conservative short term target of MerchDAO of 40M (half of RARI). That’s a 660% potential. Now you understand what I meant with the risk/reward ratio of such challenger projects. If you want an opportunity to turn $1k into $66k here it is.

Focus on the meta game

Instead of trying to buy or create the next big NFT you should focus on the meta game: It’s the platforms winning consistently in the NFT game. You want to own a share of the platform which is selling shovels in this gold rush. And you can do that by buying their tokens.