Investing in NFTs can be a daunting process. Aside from the project’s roadmap and NFT utilities, knowing when to invest in NFT is crucial as well. Indeed, big players in the space have often spoken about the difficulty of picking NFTS. For example, Gary Vee once tweeted that: “99% of NFTs won’t be good investments”. Even though the figure quoted is arbitrary, it is true that many if not most NFT projects die off shortly after launching.
So, when should you invest in NFT?
According to a recent finding by a16z, NFT’s mint price plays a big part in getting those 10x juicy returns. Now, there are many factors that affect a project’s success. However, investing in NFTs with mint prices in the range of 0.05 – 0.10 ETH generally allows you to gain 10x returns easily. The result is based on the performance of the top 150 NFT collections in a16z’s portfolio as seen below.
Arguably, higher mint prices (more than 0.10 ETH) will reduce the potential returns of early investors. But according to a16z, there are only two collections that succeeded anyway with higher mint prices. One of them is Azuki Zen and the other one is Invisible Friends. Those invested in these two NFT collections are currently enjoying more than 20x returns.
Another interesting finding is that high-performing collections usually allow 5 – 10 mints per address. Such collections include Meebits, Doodles, and Cool Cats. In fact, NFT projects with fewer mints per address generally see lower returns. This breaks the myth that NFT projects with a low mint amount per address have higher returns.
Aside from mint price and the wallet caps, there are multiple factors that influence the success of an NFT project. Social presence, community engagement, a solid roadmap, and the project team’s level of transparency are essential factors to look into. If you’re just getting started to buy your first NFT, don’t forget to check out our comprehensive guide on how to invest in NFT. As always, invest safely!