How to Flip an NFT Like a Pro - Where to Find Projects for Profit
One of the first things beginners hear when NFTs are mentioned is the potential to flip them for profit. Yes, back in 2021 the value of some NFT collections was astronomical, with prices reaching millions on NFT marketplaces for some such as Bored Ape Yacht Club. Are NFTs still a viable form of investment? What should you look for in a promising NFT project? Let’s find out.
What Does NFT Flipping Mean?
What exactly does it mean to flip an NFT? The term “flipping” is not unique to the NFT space. In fact, we often see it in real estate as well. We say property owners “flip” houses. It essentially means to purchase an asset for a price, and then resell it for a higher price, therefore making a profit.
In simpler terms, flipping NFTs just means buying them at a low price and selling them for a higher one. Like with flipping any other asset such as cars and luxury items, there is a risk to any investment. Not all NFT projects will sell at a higher value than what you bought them for. The key is to define what non-fungible token could potentially make you money.
Don’t worry, we have the knowledge and guide to help you make the right decision.
How to Flip NFTs for Profit
Let’s tackle how to flip NFTs first.
Step #1: Buy at the Right Time
One of the most important things about NFT flipping is buying at the right time. Usually, when new projects drop, the prices are the lowest. It is possible that you can purchase a number of NFTs for a higher price than what they sell for on the secondary market as well, so be aware of that.
The best way and most important factor to ensure that you make the right move is to analyze the market trends. Start small and don’t aim for big profits just yet until you’ve had more experience.
• When the NFT Drops
There are two time periods when you can get your hands on projects’ NFTs and one of them is when it drops. The drop means when the project is first released to the public for minting. In our opinion, this is the best time to buy an asset if you’re looking to flip it for money, because it is usually when the prices are at their lowest.
However, be aware that some NFT projects only have a limited number of tokens and if it is in high demand, you may not be able to mint one. The best NFTs are very sought after with a lot of hype surrounding them. Don’t worry, if you can’t get your hands on of the these NFTs, you can try on the secondary market.
• On the Secondary Market
The secondary market pertains to platforms that sell NFTs after the first mint. People can list NFTs they have bought (or ones that exchanged hands many times over) on a popular marketplace such as OpenSea.
You can bet that the prices on the NFT market are higher than what you would have paid when the project dropped, but there is still a chance the market trend could turn in your favor and you can list it for an even higher price even if you did buy it on an NFT marketplace.
Step #2: Find the NFTs
How does one find a worthy project for NFT flipping? You have to know where to look.
• Secondary Marketplace
• NFT Calendars
NFT calendars are excellent tools to use to find info on NFT drops and even rare NFTs. NFT calendars can also help you get a picture about how much your asset is in demand.
• Social Media
Ever underestimate the importance of social media when it comes to flipping NFTs. Specifically, Twitter and Discord are the two most common ones to use. Googling about a potential NFT project can only yield so much information. Getting onto social media platforms and conversing with other NFT holders and NFT flippers can give you more insight.
• NFT Tools
There are also a ton of tools at your disposal out there to find rare NFTs and info on NFTs to flip. These tools can help determine your asset’s value, rarity and demand by displaying market trends.
Step #3: Choose the Right NFT Project
Once you have chosen a platform with a lot of options, the next step is to narrow down your choices to one NFT collection. How do you pick the right one? Here are a few factors to consider:
• Collection Size
How many NFTs are in the collection? A very basic buying concept comes in here – the fewer the pieces the higher the demand (supply vs demand). The rarer your piece is and the fewer there are in circulation, the higher the likelihood that you can flip the NFT for a high price.
Is there utility connected to the NFT collection or piece? What buyers can do with the asset will influence the price and value it has on the NFT market and when it comes to flipping NFTs. For example, Bored Ape Yacht Club (BAYC) will give its holders exclusive access to events. There are also other money-flipping NFTs that help charities, ones that give discounts, and more.
Consider the benefits the digital asset can bring to the buyer. The more attractive the perks are, the more likelihood you can sell it for a better deal.
• Floor Price
As mentioned, the floor price indicates the lowest price you can buy NFTs for. All the other NFTs in the collection will go for higher than the floor price (because that’s the lowest cost). Understanding the floor price will give you a good idea of how much you can flip the NFT for.
• The Team
Who is behind the project? Not all teams will be doxed (identity revealed), but it is generally safer if they are. Why? Because rug pulls are less likely if everyone knows the identities of the team. A rug pull is when people behind a project hype it up, and then take the money of all the investors and disappear.
Keep in mind that even if a creator isn’t doxed, the project could still be legitimate. We remind our dear readers that investments, which flipping NFTs are a type of, always come with a risk. Don’t just take our word for it and don’t hesitate to do your due diligence and own research!
• The Art
While this aspect can sometimes have little impact on flipping NFTs and NFT sales (especially if the focus is utility-heavy), but the art does have a big influence over the decisions of collectors. If a project is promoted heavily due to its artwork, then you have to make sure it is high-quality.
All NFTs should have a certain level of artistic quality, but this is a category that is highly subjective.
On the flip side, one of the biggest influencers of whether or not you can sell your NFT for a high price is the rarity. Just like trading cards, the rarer the NFT you have, the more you can flip it for. Each collection should have a rarity chart or info about the attributes that define rarity.
It could either be a limited supply of tokens with a trait, or the rarity of the combination of all traits on each asset. If you’re not sure about the rarity, you can try to reach out to the team via their social media pages or use rarity tools online.
• Community Impressions
We don’t always agree with making decisions based on others’ opinions, but getting an impression of what the crypto community thinks can really give you valuable information on making profits.
A lot of the best NFTs that generated money had a lot of hype and anticipation around them before the drop. People talk about them and spread the news and support projects they believe in on social media. Join a project’s Discord and engage in discussions to determine the value of the project.
This aspect isn’t 100% important, but generally, if there are big names attached to a project (ahem, Snoop Dogg and Sandbox) then it can really skyrocket the value. However, know that advertising isn’t always trustworthy, if you know anything about the Kim Kardashian lawsuit for promoting EMAX.
Step #4: Set Your Price
The last item to consider is the price you set for your NFT when you flip it. You can’t expect an exorbitant amount of money for something you paid just dollars for. The best way to determine what the best price is for your asset is to look at the number of NFTs in a collection with the traits yours possesses, and the volume of the collection.
If you know your NFT is very rare, then you know you can demand a higher price when flipping. However, you also have to look at the desire and floor price of other pieces in the collection. If the floor price is 1 ETH, listing your piece without rare traits for 1500 ETH is quite a tall ask.
Examples of NFTs to Flip
Let us help you understand what a good NFT to flip looks like, we found some good examples and listed them below.
Battle Infinity is a metaverse project that has ultra-cool art. It is a play-to-earn (P2E) game and has in-game NFTs. There is a fantasy sports element built into the game where real-life performances will impact the outcome and also the value of the NFTs. You can flip NFTs from Battle Infinity if they have high-performance value.
We have mentioned Bored Ape a bunch of times, and it’s hard not to see that project’s name when we’re talking about flipping NFTs or even the NFT market in general. These NFTs have a very high valuation and most people hope to flip NFTs for profits as high as this collection.
If you missed out on BAYC and cannot afford the astronomical prices they go for now, you can turn your attention to the Lazy Ape Society. This series also consists of 10,000 tokens, like Bored Ape. Lots of celebrities such as Eminem and Jimmy Fallon own a Bored Ape, and if other celebrities get on board with Lazy Ape Society and it follows in the footsteps of BAYC, then the tokens could go for millions on the NFT market.
Following in the footsteps of animal collections (which seem to be popular for those looking to flip NFTs), we now have the Walruses NFT. This is a very visually compelling collection on the NFT market because it depicts walruses as historical figures.
Who are some of the iconic figures you can find? Examples are Pope John Paul, Mother Theresa, and Martin Luther King. The floor price isn’t cheap, which shows us that the creators and those looking to flip NFTs have very high expectations for the sales on the secondary market.
• Can you make money from flipping NFTs?
Yes, you can make money buy buying and selling NFTs. It’s true that you can make a quick profit by flipping, but not all the NFTS you invest in will give you a return. You have to know what to look for in NFTs to flip, know how to take advantage of undervalued NFTs and look for money-making opportunities using the right info.
Do you own an NFT that is worth a lot? The NFT market continues to garner attention and a good way to not miss out on the next investment opportunity is to keep your eyes on social media accounts and take advantage of platforms such as rarity.tools, a great tool to determine digital art NFTs value, and whether they are in high demand.