NFTs and Digital Assets Trading

NFTs (Non-Fungible Tokens) represent unique digital ownership and have created new trading markets.

Understanding NFTs

What are NFTs?

• Unique digital tokens on blockchain
• Prove ownership of digital items
• Cannot be replicated or divided
• Art, music, gaming items, collectibles

How NFT Markets Work

• Marketplaces: OpenSea, Blur, Magic Eden
• Floor price: Cheapest item in collection
• Rarity determines value
• Royalties on secondary sales

NFT Valuation

Fundamental Factors

• Creator reputation and track record
• Community size and engagement
• Utility beyond art (access, perks)
• Historical trading volume
• Floor price trends

Technical Analysis

• Floor price charts
• Volume trends
• Listing/delisting ratios
• Whale wallet holdings

Trading Strategies

Floor Sweeping

• Buy near floor price
• Lower risk per item
• Sell on volume spikes
• Focus on established collections

Rarity Sniping

• Identify undervalued rare items
• Requires deep collection knowledge
• Higher individual value
• Less liquid than floor items

Mint Trading

• Buy during initial mint
• Sell immediately after reveal
• Very speculative
• Research project thoroughly

Risk Management

NFT-Specific Risks

• Illiquidity (hard to sell quickly)
• Floor can go to zero
• Wash trading inflates volume
• Rug pulls common in new collections

Protection Rules

1. Never invest more than 5% of portfolio
2. Stick to established collections
3. Diversify across collections
4. Verify contract addresses
5. Use cold wallet for valuable NFTs