The Ultimate Guide to Blue Chip NFT Investing
In the vibrant market of NFTs, which is valued at about $6.7 billion, there is a small subcategory that drives most of the volume of transactions: Blue Chips. They are those trusted and recognized NFT projects that offer an extra layer of security to investors.
In this guide, you will learn everything there is about blue chips and all the approaches to investing in them. So, let’s start with the basics.
What Are Blue Chip NFTs?
The term blue chip NFT comes from traditional finance, where blue chip stocks, bonds, etc. are considered safe and long-term investments. To be called a blue chip, they should generate stable returns throughout the years.
In the NFT world, this term has a similar meaning. A blue chip NFT is a well-known and stable project that will retain high value in the future. Thus, this type of non-fungible token is seen as a safer long-term investment.
Which NFT Projects Are Blue Chips?
Only a few NFT projects stand out enough for their long-term stable returns to the level where they can be called blue chips. To be considered a blue chip NFT project, a collection must have the following characteristics:
· High Floor Price
· Satisfactory Trading Activity
· Notoriety in the community
· Recognizable Utility
· Respected Endorsements
By making sure all these factors are met, you can avoid giving space to projects that are only having momentum due to heavy marketing campaigns. Instead, you have a better guarantee that the collection is successful in the long term. While it would be hard to mention all blue chip NFT collections, below are some most famous ones:
· Bored Ape Yacht Club
· Mutant Ape Yacht Club
· Clone X
· Art Blocks
· The Sandbox
The Disadvantages of Blue Chips
A major difference that blue chip NFTs have in comparison to their more traditional counterparts is how long they have been around. Blue chip companies that are publicly trading have a longer history of returns. Blue chip NFTs, on the other hand, are quite new, much like blockchain technology itself. Some of the main NFT blue chips haven’t been around for over 5 years. Thus, there is some risk involved in investing even in blue chip NFTs.
It is not hard to become interested in investing in this market of long-term NFT projects. But there is a catch: blue chip NFTs can be very – VERY – expensive. Purchasing a blue chip NFT on platforms such as OpenSea is not viable for everyone. With some NFTs trading for hundreds of thousands of dollars, this market might not look so accessible at first sight. But stay with us. We will show you how you can invest in blue chip NFT with a lower budget. However, to do that, it is important to understand the main ways to invest in NFTs.
So, Should You Buy Floor Price NFTs?
The floor price is the lowest-priced NFT for sale within an NFT project, thus, a floor price NFT will be the cheapest option in a collection. This makes floor price NFTs a great way to start investing in NFTs. Besides being cheaper, they are also the easiest NFTs to sell and to profit with rises in prices. Thus, if you are a beginner, buying floor price NFTs is a great – and more affordable – approach.
If you are more advanced in the NFT trading game, there are other approaches that might include, or not, buying floor price NFTs. For example, hunting for deals that balance a fair price and interesting rarity level. It will then depend on the strategy you are using as an NFT trader.
Scalping vs Long-Term Investing vs NFT Floor Price Speculating
There are numerous approaches to investing in NFTs. Among them, three stand out as the most common ones: scalping, NFT floor price speculation, and long-term investing. These approaches follow different strategies to achieve the same goal of making a profit from NFTs. So here are the three main approaches to investing in NFTs:
This approach to investing in NFTs consists of a short-term trading strategy that focuses on small NFT price moves. Scalping can happen in two main ways. In the first, you identify an NFT project launch and mint as much as you can to resell for profit. The second way is when you scan NFT listings to find undervalued ones to buy the up (snipe them) for resale. In both cases, the reselling of the NFTs won’t necessarily be profitable. This is why, while scalping can be lucrative, it is very time-consuming and demands discipline, practice, and even some luck.
Long-term Investing in NFTs is literally the contrary of scalping, which depends on short-term price variations. Instead, the long-term approach in NFT investing focuses on buying and holding projects with quality and potential for the long run. Within this strategy, there are two distinct approaches:
Blue Chip Approach:
When investors based their long-term strategy on buying and holding blue chip NFTs. This means they focus on acquiring already established quality NFT collections that have an industry recognition of being more stable. You can say that the blue chip approach involves fewer risks since the NFTs are already well known and respected in the industry. However, blue chip NFTs are quite expensive and not everyone has the means to invest in them.
Value Investing Approach:
Also known as future blue chips approach, this strategy is an alternative solution for those who don’t have the means or don’t want to invest in blue chips. It consists of finding quality NFT projects made by teams invested in the long run, but that have not yet experienced the big hype. In other words, value investing is investing early in potential future blue chips. The challenge with this approach is finding these gems in an ocean of NFT launches with many scams among them. However, finding a blue chip before the hype is probably the most profitable scenario possible in NFT.
NFT Floor Price Speculation
As mentioned, the floor price is the lowest-priced NFT for sale within an NFT project and it is a key metric collectors and investors tend to look for. It can be an indicator of how well a given NFT collection is performing on the market, therefore, how good of an investment it can be.
Due to the importance of NFT floor prices, many investors saw an opportunity to speculate on them in order to make profits. One approach that is often used to speculate on the floor prices of NFTs is “sweeping the floor”. The term refers to buying a bulk of floor-priced NFTs of a given collection to spark their value. Once the floor price of the collection rises, the investor can then resell them and make a profit. While swiping the floor is usually an automated process, more sophisticated approaches to speculating over NFTs floor prices are available.
A New Approach to Investing in NFTs
The platform NFTperp has introduced a new way to financialize from NFTs floor prices and blue chips. It consists of betting on the floor price of a blue chip NFT collection. Investors can choose between betting short or long on these floor prices and depending on the moves of the market, they can make gains. It works similarly to how, in traditional finance, investors can bet on the success or failure of listed companies and are rewarded if their predictions are correct. This allows new investors to enter the blue chip NFT market without needing to spend hundreds of thousands of dollars on NFTs. In addition, blue chip NFT owners can also reduce their risk by shorting their NFTs. This way, if there are market fluctuations, they are more secure.
How to Speculate the Floor Price of Blue Chips with NFTperp
NFTperp is a perpetual futures dex for NFTs. As explained, on the platform, users can short or long blue chips’ floor prices. Thus, if you can’t afford blue chip NFTs, try NFTperp. The process is quite straightforward, and you can easily do it in a few steps. The platform offers a demo where you can try out their speculation tool.