NFTs or Non-Fungible Tokens gained a lot of interest with spike in price of some of the most popular NFT projects like CryptoPunks, Bored Ape Yacht Club, CyberKongz etc. This is when I started looking more into NFTs and various projects. I learnt things the hard way going by my own research – some clicked and some missed but overall it was a great journey. In this article I will show you how you can make money flipping NFTs.
Make Money Flipping NFTs
In this article, I am sharing my personal experience on making money flipping NFTs and its only for educational purpose so please do your own due diligence before making any investment.
Now let’s jump onto the main topic on how to make money flipping NFTs…
Identifying the NFT Project to Flip
The first thing to do is to identify or shortlist projects which can give us a great opportunity to invest. The platform I prefer the most for doing this task is OpenSea.
Do note, there are tons of NFTs listed on OpenSea most of it doesn’t have any utility or a strong community so you need to be very careful in filtering and identifying the right NFT project to invest. Below are some of the important pointers to consider: –
1. Increase in Trading Activity
We need NFT project that is super active with lot of buyers and sellers so we can flip our NFT instantly whenever needed. You can get this detail from OpenSea by clicking on Stats -> Activity.
Link:- https://opensea.io/activity
Look for projects with multiple transactions (refer to Item and To columns) from different buyers. This is very important as you may see a lot of bulk buying from single users and most of them are inactive or new projects, so it’s necessary that you filter the project which is active with good no. of buyers (active community).
Filter out 4-5 projects following the above steps!
2. Announcement & Community Check
Next step is to do a community check and find the reason for spike in trading activity. This can be easily done by checking the Twitter & Discord channels of the project. Following things, I look for before initiating the trade: –
A. Active Followers: –
Check the no. of followers on both Twitter and Discord – higher the count better the project. Project admins can easily drive fake traffic so do check the activeness of the followers by checking few posts on Twitter.
For example, if a project has 10k followers and their posts are liked, retweeted by only 10 users then we can assume that the followers they have are fake or not active. If the posts are liked and retweeted by many followers then we can consider it as genuine and can invest on such projects.
B. Announcements: –
Most of the project that spikes up are backed up by some positive news or announcements. If there is no announcement and the team is inactive then the spike maybe temporary so you may have to skip or enter and exit rather quickly than holding it for long.
There are lot of projects in OpenSea which pumps and then drops down in price so you need to be very careful. Activity tab under each of the projects gives you some idea on the price movement which can help decide a good entry point.
Bid and Buy NFTs Cheap
If you are familiar with the above steps then let’s move on to the next most important feature i.e. Collection Bidding.
Collection Bidding feature was launched recently in OpenSea and all it does is it sets a bid to the entire collection of NFTs. Let me quickly explain how we can use this function to our benefit on OpenSea.
Every collection has a floor price – lowest price at which the user is ready to sell his NFT. Offer price or bid price is the price at which a user is ready to buy an NFT from the collection. Price difference between the offer price and the floor price in most of the projects are huge e.g. Floor price maybe 0.1E however the bid price would be 0.06E with a difference of 0.04E. Any user buying the NFT at 0.06E can easily sell it for 0.09E – making a quick profit of 0.03E. This is the concept that we will apply in our flipping.
For the list of projects, you filtered identify the one which has a good gap in offer and floor price. Bid on the entire collection by increasing the bid by 0.001E (e.g. if the current bid is 0.05E then increase it to 0.051E). Do the same with other projects as well and then wait for the seller to drop the NFT cheap.
There are lot of paper hands in the market who would drop it cheap so just wait patiently.
Sell Below the Floor Price to Earn Flipping NFT
It will just be a matter of time before you get your hands on the first NFT at the lowest price. Now it’s time to make some profit by selling the NFT by dropping it below the floor price.
If you have brought the NFT @0.05E and the floor is 0.08E then drop the NFT for 0.075E resulting in a profit of 0.025E. Deducting the royalty and service charge you would have easily made around 0.02E. Now continue doing this step multiple times!!!
Conclusion
This article just gives you a rough idea on how you can easily filter and make money flipping NFTs. You can easily build on it and can make some huge money on a daily basis.
Like I advised earlier, this article is only for educational purpose. It is actually easy to make money flipping NFTs however it takes a lot of experience and knowledge to choose the right project. So, do spend some time studying about the projects before you jump onto it. Always remember, one wrong move and all your money will be gone!
I hope you find this article useful, if yes then I request you to share the same with your friends so even they can benefit out of it. Now let’s go and make some money flipping NFTs!!!
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