Since NFTs are only accessible to cryptocurrency users, traditional investors may also gain exposure to NFTs by investing or trading in NFT stocks.
Many of the NFT stocks you can invest in are companies just starting to explore the NFT space. Some are NFT stocks that sell blockchain-backed digital tokens, while others use NFTs for marketing purposes.
There is quite a bit you should know before you start investing. If you want to invest in NFT stocks right away, here is a quick guide that can help:
- Research your NFT stocks – The best NFT stocks to buy will depend on your own personal choices – you may choose a stock based on the value of their own NFT collections or based on their ability to use their existing technology and reach scale the NFT market.
- Define your strategy – Trading lets you speculate on the price movement; dealing lets you take direct ownership of the NFT stocks.
- Take your position – create an account with us to start trading or investing in NFT stocks.
What is an NFT?
NFT stands for Non-Fungible Token. This is a digital asset that exists on the blockchain. Similarly, to physical assets, NFTs can be purchased and sold. The value of an NFT comes from its uniqueness because it is registered on the blockchain. There can’t be more than one version of that NFT.
NFTs, or non-fungible tokens, are digital assets that exist on the blockchain and are used to prove ownership. The technology behind the NFT industry is constantly evolving. It is also the same technology that maintains the ETH blockchain.
By comparison, a share of stock is fungible because a company issues millions of shares all the same. One share of Apple's common stock is like another. But if you buy an NFT, it is unique and the specific data relating to the token is stored on the blockchain (normally on the Ethereum blockchain).
Some investors may be eager to profit from the NFT space, as some NFT prices exploded in the past. While most NFT enthusiasts are expecting a future boom, nothing is certain. Recent news about technology companies launching or getting involved in this emerging technology has helped some NFT stocks surge.
What are NFT stocks?
NFT stocks are shares of listed companies that are involved in the NFT markets in some way. This is a popular way of getting indirect exposure to NFT markets. NFT stock companies are rare, but there are more companies expanding into this sector. Companies that launch NFT collections or supply the technology necessary to run the NFT ecosystem may offer the best NFT stocks.
The technology behind the NFT industry is constantly evolving. It is also the same technology that maintains the blockchains. This means that any NFT stock lists will closely correlate with crypto markets.
NFT stocks might be a more popular option for investors since they offer portfolio diversification, dividends in some cases, and liquidity.
Investors should pay extra caution when choosing an NFT stock to add to their portfolio, but an NFT investment could turn out to be a good decision for long-term investments. NFTs may become the norm for digital ownership, and this can cause NFT stocks to surge. A stock investment may also reward investors with dividends. And one of the most important aspects is liquidity, as NFTs are not as liquid as NFT coins and especially stocks. They are only worth as much as a buyer is willing to pay, whereas stock trading is instant during normal market conditions.
While investing in crypto and NFTs, which are strictly digital assets, might be a relatively new concept, investing in stocks isn’t.
Top NFT stocks to watch
We have included companies leveraging NFT technologies, entertainment companies, metaverse companies, NFT marketplaces, collectible companies, or those earning income from NFTs.
Note that these aren’t necessarily the best NFT stocks to buy, but rather some of the more popular NFT stocks based on various factors such as market cap, future growth prospects, dividends, and more.
The top NFT stocks to buy will depend on your risk appetite and specific areas of interest. Here, we'll discuss some of the top NFT stocks for those looking to capitalize on this new trend.
- eBay (EBAY)
- Shopify (SHOP)
- Coinbase (COIN)
- Ubisoft (UBI)
- Nvidia (NVDA)
- Meta Platforms (META)
- Cloudflare (NET)
- GameStop (GME)
- Nike (NKE)
- Dolphin Entertainment (DLPN)
- Defiance NFT ETF (NFTZ)
eBay (EBAY) is a global e-commerce platform that connects traders with all kinds of commodities. The website also offers business-to-consumer transactions for American customers and does now include NFT trading. This means that traders can now trade NFTs such as digital images, videos, and artwork directly on the platform. eBay also announced that it would be expanding its platform to allow digital collectibles based on blockchain technology. The company also plans to allow traders to use cryptocurrencies to buy and sell goods and services.
Shopify (SHOP) is an e-commerce platform worldwide that allows you to list, sell, and buy products and services online. Shopify also allows businesses to start to sell and buy online. The platform allows them to advertise products via social media and to receive or pay for goods and/or services using legacy payment methods. Businesses can manage orders, track buying or selling data, ship and track payments. Shopify allows anyone to list, buy, sell, and mint NFTs. Customers can purchase NFTs and claim them. The platform's NFT Marketplace allows traders to pay for and receive NFTs using credit cards and cryptocurrencies.
Coinbase (COIN) is one of the most popular and beginner-friendly crypto exchanges on the planet. It is the largest cryptocurrency trading platform by trading volume. It accepts fiat-to-crypto and crypto-to-crypto transactions. Coinbase offers its services to both institutional and retail clients. Coinbase's marketplace allows people to create, collect and showcase NFTs. The marketplace is currently being tested in the United States, with plans to expand into other countries.
Ubisoft (UBI) is a French video game company. In 2021, they launched Ubisoft Quartz which is an NFT project that aims to transform in-game items from triple-A games into collectible NFTs called Digits. When you own one of these Digits, Ubisoft says you own a unique version of an in-game item that you’re free to sell to other players. The response to the project was overwhelmingly negative, even among Ubisoft employees, who referred to it as an exercise of “private property speculation, artificial scarcity, and egotism.” However, the company is moving on with its NFT business, and it will be interesting to see if the gamble pays off.
NVIDIA (NVDA) is well-known for its graphic cards, which are used in everything from laptops to electric cars. NVIDIA has made it clear that they are looking at other digital and virtual markets, as well as scaling within the Metaverse. In January 2022, the company announced that it would offer the software free of charge to artists and creators who create virtual worlds. This opens the door for its NFT marketplace.
Meta Platforms (META)
Meta Platforms (META), formerly known as Facebook, is a company that has made major strides in virtual reality integration over the past decade. In 2014, Facebook acquired Reality Labs, the original developer of the Oculus VR headset. This was a significant step in the long-running quest to make virtual reality mainstream. In 2021, Facebook rebranded as Meta in its attempt to embrace the metaverse, which is more than just a Web3 concept.
Meta also expressed strong interest in integrating non-financial transactions (NFTs) into Facebook and Instagram. NFTs are actually already available on Instagram, which will benefit photographers and artists who use the platform for their products and services. NFTs are likely to continue to grow on the image-sharing platform. Instagram has expanded support for NFTs into 100 more countries.
Cloudflare (NET) is a CDN (content delivery network) company that provides security and reliability for external-facing resources such as websites, APIs, and applications while also mitigating DDoS attacks. On average, Cloudflare can handle 32 million HTTP requests per hour. These requests are subject to security scanning. This is possible because the service has a large network of servers that it operates.
Cloudflare also offers Cloudflare Stream, which allows video publishers to publish online without having to worry about video quality, device compatibility, or storage buckets. This service supports the streaming, storage, and publishing of NFTs. Through an API, every video can be represented using an NFT that is based on Ethereum’s ERC-721 protocol. Every NFT that is created on another platform can be linked to a video via a token. The video can be purchased and smart contracts can be added to it so that the owner receives royalty payments for each resale.
Nike (NKE) is a multinational corporation that offers innovative footwear, owning the entire production process, including the design, development, manufacturing, and worldwide marketing and sales of its products. Nike was one of the first legacy brands to join the NFT space. In December 2021, Nike acquired RTKFT Studios, an NFT studio, to allow them to create digital sneakers and other "artifacts." Since then, Nike has been pushing to expand its reach into the metaverse. Nike aims to be a leader within the rapidly growing apparel-focused NFT market, given the cultural reputation that Nike has as a leading brand in sneakers and apparel.
Alternatively, investors can buy shares in NFT-linked exchange-traded funds (ETFs). Prospective shareholders should first understand and agree with how a fund selects investments for its portfolio. These ETFs invest in prominent metaverse-related companies with the hope of matching or outperforming benchmark indices.
NFT-linked ETFs are a popular option for investors who want to gain portfolio exposure to the NFT space without having to research and choose individual companies themselves.
You can find an ETF to suit any NFT investment strategy you desire by using CAPEX WebTrader.
Ways to invest in NFT stocks
There are two routes to investing in NFT stocks: speculating on their prices using CFDs or buying the assets in the hope they increase in value.
Trading NFT stocks using CFDs
A CFD is a contract in which you agree to exchange the difference in the price of a cryptocurrency from when you first open your position to when you close it. You are speculating on the price of the market rather than taking ownership of the NFT coins or stocks. If you open a long position and the cryptocurrency or stock or ETF does increase in value, you’ll make a profit, but if it falls in price, you’ll make a loss – the opposite is true for a short position.
Before you can start, you would need to open a CFD trading account.
Buying NFT stocks
This means that you take ownership of a portion of the company outright, with the intention of holding it with a brokerage and profiting if it increases in value.
Before you can start, you would need to open an investing account with a broker like CAPEX.com.
With a trading account, you can access all these assets within one account.
Each investor should research the available ways to invest in the metaverse before deciding what’s the best option for their situation. Remember that the metaverse and its assets are volatile assets, as it’s the case with crypto, and you shouldn’t invest more than you are willing to lose.
Some of the most popular NFT investments are ETFs and stocks because these investments do not require investors to get involved in the NFT space directly. Another advantage when investing in NFT-related assets is that you can also use U.S. Dollars instead of cryptocurrency.
How to invest in NFT stocks with CAPEX.com
Here is how to invest in NFT stocks with an international, highly regulated broker like CAPEX.com:
- Choose which type of account you want to use. Your first concern should be your risk appetite and time horizon. If you want to buy and hold cryptocurrency stocks, open an investing account. If you want to speculate on price movements (including falling prices) with zero commission and leverage, open a CFD trading account.
- Create an account. Regardless of your chosen account, you need to register and complete the KYC process to verify your identity.
- Fund your account with fiat money. Before buying and trading any crypto stock, you need to fund your exchange account with U.S. dollars, Euros, or other currencies.
- Select your NFT stocks. It’s time to decide on your first NFT stock investment. We strongly recommend that you thoroughly research the public companies that have NFT holdings or are somehow invested in the NFT space. Of course, you may choose to invest in one or more NFT stocks.
- Place a buy order for your chosen NFT stock. Follow the steps required by the trading platform to submit and complete a buy order for one or more NFT stocks.
When trading NFT stocks, the CFDs (contracts for difference) are stored in your account and are far more liquid than the underlying asset or NFT. However, you should be aware that CFD trading is fast-moving and requires close monitoring. As a result, traders should be aware of the significant risks when trading CFDs. There are liquidity risks and margins you need to maintain; if you cannot cover reductions in values, your provider may close your position, and you'll have to meet the loss no matter what subsequently happens to the underlying asset.
Pros of investing in NFT stocks
- NFT stocks, just like any other stock, can trade in fractions. NFTs, on the other hand, cannot be divided.
- NFT stocks can be bought with fiat money, and no blockchain or cryptocurrency transaction is needed.
- Investors can make money from their NFT stock investments and receive dividends based on the company's profits over time.
- NFT stocks belong to public companies that have a long history on the market. This can give you a predictable return on your investment. These well-established companies are listed on the major stock exchanges, and they provide access to financial and data analysis reports.
- Buying NFT stocks is easy and can be done instantly. Investing in NFT via marketplaces can take a long time, as they are far less liquid, and you must find a buyer willing to accept your offer.
- NFT stocks can help investors diversify their investment portfolio across different industries and countries, which contributes to a diversified portfolio.
- NFT stocks are less volatile as the companies offering them have various income sources and are less affected by a potential drawdown in the NFT space.
- Investors can also choose to invest in NFT-linked ETFs, which provide exposure to a basket of stocks with interest in the NFT space.
Cons of investing in NFT stocks
- The volatility of NFT assets can result in a loss of investment.
- It is impossible to predict the future success and profitability of any company, including those offering NFT stocks.
- If the company has financial difficulties, the stock price may drop.
- If the company isn’t profitable, investors will not receive any dividends.
Summary for NFT stocks
NFTs and NFT stocks are a growing field, with investors still figuring out where they can get in on this emerging digital world.
Major brands, including Marvel, Adidas, and many more have launched their own NFTs. It is a new asset class, with lots of interest and large amounts of money being exchanged. That's why investors care.
Digital art can be bought as a passive investment, or it can be traded like a stock. While these stocks are linked to NFTs, they are still stocks, so learn how to invest in stocks before purchasing.
Before you start investing and trading in NFT stocks, you should consider using the educational resources we offer like CAPEX Academy or a demo trading account. CAPEX Academy has lots of courses for you to choose from, and they all tackle a different financial concept or process – like the basics of analyses – to help you to become a better trader or make more-informed investment decisions.
Our demo account is a suitable place for you to learn more about leveraged trading, and you’ll be able to get an intimate understanding of how CFDs work – as well as what it’s like to trade with leverage – before risking real capital. For this reason, a demo account with us is a great tool for stock investors who are looking to make a transition to leveraged trading.
Why do people invest in NFT stocks?
NFT stock investors want to be exposed to the NFT marketplace without having to own an NFT. Directly owning the NFT incurs a lot of extra steps, such as buying cryptocurrency, transferring it to a non-custodial crypto wallet, and buying the NFT from an NFT marketplace. Most traditional investors will have a tough time learning how blockchain transactions work. Also, NFTs are far less liquid than NFT stocks.
Are NFTs a good investment?
Investing in tokenized blockchain assets such as NFT stocks is still a gamble. Many companies are experimenting in this space, but nobody can tell if NFTs are a good investment for the long term.
Before investing in NFTs and NFT stocks, make sure you understand the mechanism of this type of digital asset, how it is valued and why people are using them. Remember that not all NFTs are the same, and not all companies offering NFT stocks are contributing the same to this new technology. NFTs are specific assets that can’t be interchanged, and this property may also affect the price of NFT-related stocks.
How can I invest in NFT stocks?
Like any other stock, NFT stocks don’t rely on blockchain technology, but they wouldn’t exist without it. The entire space is interconnected, and companies that offer NFT stocks can range in their products. Some NFT companies may offer NFT collectibles, others offer the infrastructure needed to create these digital assets, and others offer the tools to create NFTs. Luckily, you can access all the tools to trade and invest in NFT tools using one single platform.
Users/readers should not rely solely on the information presented herewith and should do their own research/analysis by also reading the actual underlying research. The content herewith is generic and does not take into consideration individual personal circumstances, investment experience or current financial situation.
Therefore, Key Way Investments Ltd shall not accept any responsibility for any losses of traders due to the use and the content of the information presented herein. Past performance and forecasts are not reliable indicators of future results.