If you’re reading this, chances are you’re interested in flipping NFTs. The sale of these digital assets hit a record high of $17.7 billion in 2021 alone. Whether you’re a seasoned pro or just getting started, there’s always room to learn and improve your technique. In this article, we’ll run through the basics of how to flip NFTs for profit.
What is NFT Flipping?
Flipping is a concept that has been around for some time, and non-fungible tokens (NFTs), are just the latest items to join the list of profitably flippable items. Ideally, flipping is the art of buying something at a lower price, holding onto it for a while in anticipation of a price rise, then selling it later at a higher valuation to make a profit.
The Rise of NFT Flipping
When NFTs first hit the market, nobody knew how valuable these digital assets were. In 2014, when Kevin McCoy minted Quantum, the world’s first, on the Namecoin blockchain, very little was understood about NFTs, let alone how to monetize them. Quantum was, at the time, just a way to prove that it was possible to create a digital asset that wasn’t a cryptocurrency.
However, realizing this possibility opened many doors, and people started experimenting with creating value from these unique tokens. NFTs showed the possibility of becoming valuable when Matt Hall and John Watkinson created CyberPunks.
These 10,000 unique avatar characters depicting London pop culture were initially given for free to anyone who owned an Ethereum wallet. However, over time, the hype around them grew, and it became clearer that NFTs would become valuable blockchain assets.
NFT Flipping Goes Mainstream
The next big breakthrough for monetizable NFTs came with the launch of CryptoKitties in 2017. This game created NFT pet characters that people could buy, breed, and trade. This is where the concept of NFT flipping first started. Players would buy cheaper CryptoKitty NFTs, advance them, then sell them for profit. Other games began to borrow the concept, and NFTs like Axies and Bored Apes soon surfaced.
However, NFT flipping went mainstream during the 2020 NFT bubble rush. With Covid-19-related quarantines and people’s financial situations growing increasingly strained, many people turned to NFTs as a way to make money and pass the time. So in 2021, NFTs like CryptoPunks, which sold at less than $100 four years before, were now being flipped for over 2 million dollars, and there has been no turning back.
How to Find NFTs to Flip?
NFTs are profitable, but that doesn’t mean that all NFTs have the same potential to generate profits. So, how do you find an NFT that is worth flipping? Here is an NFT flipping guide with the characteristics you need to look out for to find an NFT worth flipping.
Founding Team and Endorsements
The first quality of an NFT that you should analyze is its founding team and any celebrity endorsements that the coin has. Identifying these traits is essential in understanding the validity and future sustainability of the NFT.
What you’re looking for here is an NFT launched by a reputable and experienced team. It’s preferable but not mandatory for the team to have prior experience in NFTs or other blockchain projects. This means they are more competent at creating, marketing, and maintaining the value of their NFT.
You should also analyze the celebrity endorsements, if any, that are attached to the NFT. With the rise of social media celebrities and influencers, numerous counts of NFT rip-offs are backed by endorsements from these social network stars. So avoid settling for an NFT before you verify that they are legitimate and, if possible, limit yourself to mainstream celebrity endorsement.
Community engagement is another indicator of a good NFT to flip. An NFT with high engagement and positive community reviews is more likely to attract willing buyers. This is beneficial when you flip the NFT because its vibrant reputation acts as indirect marketing, making it easier to convince buyers.
To analyze an NFTs community, follow them on Twitter and other mainstream social media platforms. Also, join their Discord server and interact with members to get a gist of how the NFT team responds to questions, their roadmap, and the overall community feeling about the NFT.
Cost of the NFT
The market price of an NFT is an excellent way to determine whether or not it is worth flipping. When flipping NFTs, you want to make sure you can make as much profit as possible. Therefore, finding a relatively affordable coin with the potential to increase in value is more important than buying an expensive NFT and hoping to sell it at an even more exorbitant price.
While mega NFT sales have happened in recent times, the likelihood of finding buyers willing to buy digital assets at very high prices is low. You are more likely to find NFT fans who can afford less expensive NFTs. But, if you buy the NFT at a much lower price, you can still make significant returns.
NFT rarity refers to the degree of uniqueness for a particular asset and is an excellent marker for an NFT worth flipping. Rarity indicates how rare an NFT’s attributes are because rare NFTs are more likely to flip quickly in open markets.
There are multiple indicators and tools that help determine NFT rarity. The most popular NFT rarity tools include Rarity Snipper, Cryptoslam, and Rarity.tools. These sites scan an NFT’s digital DNA and use various formulas to arrive at aggregated rarity values to help you choose more valuable digital assets.
How useful a given NFT is can make a major difference. NFTs with extended benefits like winning prizes or meeting celebrities stand a higher chance of attracting more buyers.
To make NFTs have more use than mere aesthetics, companies like Hash are partnering with major brands to help them replace their loyalty programs with NFTs. This will make customers gain more value from the companies and flip more profits from buyers who want to enjoy the perks of such NFTs.
How to flip NFTs
NFT flipping is a two-step process. The first step involves the acquisition of the NFT, while the second part is the actual flipping. Let’s explore these processes individually to get a clear picture of how you can flip NFTs.
Step 1: Acquiring NFTs
There are two main strategies for acquiring NFTs. Here’s a breakdown of each strategy.
The first and most lucrative way is to mint them. Minting means buying an NFT as soon as it is released before it hits the secondary markets. When minting, NFT prices are significantly lower than in open markets, giving you a headstart.
Because of the high demand for high-quality NFT projects, minting is reserved for people on the whitelist. A whitelist is a list of people who will have early access to an NFT before it goes live. To get whitelisted, you need to be one of the earliest people to join the NFT Discord server to learn about the eligibility criteria and the NFT’s release date.
Buy From Secondary Markets
The second way to acquire an NFT is to purchase cheap nfts on the open market. Open or secondary markets are online shops for NFTs. You can visit such markets, analyze which NFTs are trending and which are likely to give you higher profits, research them, buy the NFTs, and you’re good to go.
Step 2: Flipping an NFT
NFT flipping begins once you have your NFT and have identified an NFT marketplace for it. There are multiple markets where you can sell NFTs, and the flipping process may differ slightly for each, so for this section, we will use the OpenSea market to illustrate how to flip a coin.
- First, ensure you have a crypto wallet, preferably MetaMask, the most popular wallet on OpenSea. You can use this guide to help you set up a MetaMask wallet.
- With your wallet ready, head to a crypto exchange like Coinbase and purchase Ethereum.
- Once you have enough ETH and your NFT is in your wallet, go to OpenSea’s website and click on the Wallet icon next to the Profile icon.
- Connect your wallet by clicking on its icon in the list on the page that opens. In this case, click on MetaMask to connect.
- This will redirect you to a MetaMask tab where you need to verify the connection request. It will then give you a pop-up asking you to accept and sign into OpenSea’s terms and conditions. Click on the Accept and Sign button.
- Once you connect your wallet, navigate back to the Profile icon on OpenSea, click on the My Collection option and select the NFT you want to sell.
- An Item page will open with the NFT’s details. At the top right side of this page, click the Sell button.
- Enter the price of the NFT by clicking the Fixed Price button. Alternatively, click the Timed Auction button to allow people to bid for the NFT.
- Set the duration for the sale, and determine whether or not you want to reserve the NFT for a particular buyer. Then, click on the Complete Listing button to list your NFT for sale.
- Confirm your transaction details, and wait for a pop-up confirmation that our NFT is up for sale.
Best NFT Marketplaces
Before you flip an NFT, you need to identify a market. NFT markets are an excellent place to showcase your NFT and get potential buyers. Here are several options you can explore for the best NFT marketplace experience.
OpenSea is one of the world’s largest NFT marketplaces, with over 700 NFT projects on its list. This platform allows NFT enthusiasts to buy and sell digital assets, including collectibles, art, trading cards, sport NFTs, gaming NFTs and even domain names that are censorship resistant. OpenSea supports ERC1155 and ERC721 assets and top NFTs from games like Axie Infinity, Decentraland, and Cryptokitties.
Nifty Gateway is another popular NFT marketplace. The marketplace belongs to the crypto exchange Gemini and has gained a reputation as a high-end NFT marketplace. After selling digital art to top celebrities like Grimes, and Daniel Arsham, Nifty Gateway became a one-stop-shop for top-notch NFTs.
Another NFT marketplace with a focus on art is Rarible. Rarible is a community-based NFT marketplace where people buy the platform’s token RARI to own a share of the platform. Although you don’t have to own shares to trade on Rarible, the platform awards you its ERC-20 token if you actively buy and sell NFTs there.
Once an exclusive invite-only marketplace, Zora has morphed into an all-inclusive space for NFT trading. With art, media, and music NFTs, Zora is a vibrant platform for anyone who wants to flip entertainment-oriented NFTs.
Solana-based NFT marketplace Magic Eden is also an amazing platform to flip NFTs. This site has a massive collection of some of the best NFTs to flip, and boasts a trading volume of at least $1.6 billion. It is one of the best marketplaces to flip game-related NFTs.
1. How Do You Flip NFTs on OpenSea?
Flipping NFTs on OpenSea is easy. All you need is an ETH-supportive wallet and an OpenSea account. With this, you can click the Profile icon on the OpenSea website, select an NFT from your wallet that you want to flip, indicate its price and the duration of its sale, confirm your transaction, and you’ll be good to go. You can read the How to Flip an NFT section in this article for a more detailed explanation.
2. What Kind of NFTs Sell Best?
The genre of an NFT isn’t what determines how best it sells. Instead, the NFT that is likely to sell best has a reputable founding team, proper celebrity endorsement, rarity, and utility.
3. Are NFTs Safe to Invest in?
NFTs are very safe to invest in. However, because they are digital assets, their value is highly volatile. So, do not buy an NFT expecting its value always to appreciate.
4. How Do You Make Money Flipping NFTs?
The key to making money when flipping NFTs is to acquire the NFT at a low cost and sell it at a higher cost on an open market. The difference between your buying and selling price for a given NFT determines how much you make.