What are NFT Stocks? Everything You Need To Know

An NFT is a digital version of something that exists in the real world. At the moment, most NFTs represent art, music, in-game assets, images, and brands. But NFT Stock is a relatively new term in the sector.

While cryptocurrencies such as bitcoin are said to be fungible, NFTs are not. Bitcoin is a fungible asset since each bitcoin has the same value as another bitcoin. NFTs, on the other hand, are assets that cannot be swapped for one another. Each one is distinct and has its properties written into the blockchain.

Adding NFT stocks to your portfolio depends on the amount of risk you can take.

But let’s now understand what are NFT stocks.

What are NFT Stocks?

Many firms are leveraging NFTs in two different ways:

  1. Developing and minting NFTs
  2. Investing in the NFT market

And if you invest in the stocks of these companies, you are investing in NFT stocks. In a nutshell, NFT stocks are shares of a firm that is involved in the NFT market. NFT stocks haven’t been as popular as NFTs, but they’re slowly becoming more prevalent as more companies change their business models to use NFTs.

Are NFT stocks even relevant? Yes, since investors and organizations, like any other hot consumer trend, are keen to join NFTs. As a result, businesses of all sizes are venturing into the NFT market. For example, VISA purchased a $150,000 NFT with the intention of better understanding the technology before selling NFT-related services to their subscribers.

What is the difference between NFT and NFT stocks?

Firstly, NFTs provide you with ownership over digital assets. But with NFT stocks you are only investing in a company, so you have no direct control over the NFTs.

Secondly, many NFTs are associated with enormous profits that are very volatile in nature, but that is dependent on what project it is. Furthermore, the price of the cryptocurrency used to purchase the NFT, like ETH, can fall, bringing the NFTs down with it.

NFT stocks, on the other hand, are based on a company’s value with real-world assets and other asset classes unrelated to the crypto market. As a result, NFT stocks are more stable than actual NFTs.

Thirdly, cryptocurrencies and NFTs have different tax categories. They are both subject to capital gains tax and are categorized as collectibles. This means that NFT holders may not benefit from the same long-term capital gains rates as traditional stockholders. Therefore, NFT holders may face increased taxation.

NFT stocks have struck a good balance between NFTs and regular equities, taking into account the benefits and limitations of both approaches. Subsequently, it has created a new opportunity to profit from the rise of NFTs without really owning one or being exposed to extreme volatility. Here is a list of the top five NFT stocks based on their market performance :

Top 5 NFT Stocks to Invest in:

1) Lucky Block

It is a crypto-lottery platform built on the renowned Binance Smart Chain (BSC) network. While Lucky Block is not equity, it can help diversify your portfolio and maximize the risk-reward ratio.

The Lucky Block crypto-lottery platform intends to decentralize and transparently transform the lotto process by moving it on the blockchain. Because Lucky Block’s lotto drawings are totally digital, people from all over the world can participate, leading to larger and more frequent payouts.

2) Draftkings

Draftkings, founded in 2012, specializes in online betting and sports fantasy competitions. Draftkings went public in 2019 on the NASDAQ.

Draftking just created an NFT marketplace for sport-related NFTs, allowing users to buy, trade, and hold sport-related NFTs. If sports NFTs take off. Drafking investors will surely benefit greatly.

In terms of its exposure to NFTs, Draftkings has now created a program that releases new sports-related tokens on a regular basis. This is accomplished through collaboration with Autograph, which includes signed NFTs from a variety of prominent athletes.

3) Cloudflare

If your primary goal in looking for the top NFT stocks is to invest in firms with significant upside potential, Cloudflare is well worth a second look. Simply put, Cloudflare is a popular technology stock that is involved in safely delivering content via the cloud. It has one of the largest networks in the market and can provide lightning-fast execution rates.

Cloudflare now supports NFTs, ensuring the company’s continued innovation. In its current state, the Cloudflare platform does not allow you to generate NFTs directly. As a result, you would still need to employ a third party for this, such as OpenSea.

4) Mattel

Mattel is a well-known toy manufacturer that was formed in 1945. In addition, the company debuted on the NASDAQ in 1960, making it one of the oldest NFT stocks we will review today. Mattel shares have reached a plateau in recent years. Since early 2017, the share price of Mattel has hardly budged.

In the preceding five years, Mattel’s stock price has increased by less than 1 per cent. In the past 12 months, the stock price has only increased by 8%. Mattel, therefore, intends to revive its business strategy by joining the NFT market.

Initially, the company manufactured Hot Wheels non-fungible tokens, which were reasonably successful. Customers can now directly purchase Barbie NFTs from the Mattel Creations website.

5) eBay

eBay is a multibillion-dollar e-commerce company with a market capitalization of $45.48 billion. Over the years, its platform has allowed the purchasing and selling of things.

 eBay has recently shown interest in the NFT industry, despite its preference for dollar transactions over crypto transactions. However, its stock price has not changed significantly, and the future will depend on how they leverage NFTs.