- Date : 03/10/2022
- Read: 4 mins
Emerging technology across the world has contributed to the popularity of NFT in this digital age. NFT’s can be used to store art, music, or any digital data that the investor wants to purchase or sell. With the rise in blockchain technology, NFTs can become the future of investment for the present and upcoming generations.
What is a Non-fungible token (NFT)?
Non-fungible token is a form of the secured locker which can be used to store digital assets such as music and art. It incorporates blockchain technology to store the asset which makes it impossible to replicate the asset or sell it without the owner’s consent.
Also Read: How NFTs are developed in the Real world?
The NFT market is expected to reach 35 billion dollars in 2022. This showcases that it is becoming one of the biggest investment markets in the world. With the rise in access to technology and the advent of the digital era NFTs will gain more popularity and will be used for selling physical assets. NFTs allow investors to make secure and profitable investments which makes them highly attractive.
Also Read: Looking to buy NFTs in India?
Benefits of investing in Non-fungible tokens (NFT)
Investing in NFT can be considered easy as compared to other financial securities since each NFT represents a unique asset. Investing in NFTs has the following benefits:
Also Read: How to invest in NFTs in India?
1. The authenticity of the asset
NFTs are based upon blockchain technology which ensures that the digital asset cannot be copied or sold without the owner’s permission. It allows the investor to be sure that the asset is not fake, and they can easily verify its authenticity.
2. Huge profit margins
NFT’s comprise collectables, trending art, and rare assets. The value of these items can increase exponentially over time leading to huge profit margins for the investor.
3. Low barriers
Any individual present across the world can create an NFT with a digital asset created or owned by them. This allows every creator a fair chance to sell their digital asset and makes it easier for them to do so.
Also Read: What are NFTs? How are they worth millions?
Best investment tips for Non-fungible tokens (NFT)
The NFT market is huge and complex which can make it difficult for new investors to understand and make decisions. The best NFT tips for investment that must be kept in mind while trading are:
1. No tax liability until the NFT is sold
Creating or holding an NFT does not incur any tax. The trader has to pay the tax only when an NFT is sold. This means that an investor can create as many NFTs as they want and sell them only when a huge profit is to be made.
2. NFT Tax liability on purchasing an NFT
Purchasing of NFT using cryptocurrencies can result in a tax liability. Therefore, it is preferable to purchase NFT through direct payments in terms of money.
3. NFT tax liability on royalties and income
Creators can receive royalties or income even after their NFT has been sold to another person if they incorporate these terms in the contract. These royalties and income can also be liable for taxes.
4. Trading Volume
Trading volume of the NFT showcases its demand in the market. Always been on the lookout for NFTs whose demand is currently on the rise or can rise in the future. With the rise in demand the profitability of the trader will also increase.
5. Reputation of the Creator
In order to sell the NFT at a good price in the future, it must be ensured that the creator of NFT is reputed. NFT from reputed creators can be sold as collectibles or at higher price when the value of their work increases.
6. Unique holders
NFTs can become a collectible if the demand is high and the number of owners for the type of NFT are low. The trader must look for a type of NFT for which the no. of holders are less so that if the demand rises it can be sold at a premium price.
With the advent of the digital era, NFTs are on the rise and will become the investment of the future. The rapidly increasing market and a pool of opportunities make it attractive for investors to become a part of the NFT market. Become a part of the most secure and profitable market of the digital age by trading in NFT!
Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.