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Want to invest your money to get the best returns, but are confused between two major options—NFT and Crypto?
Don’t worry, you have chosen the right path. This article will help you to come to a conclusion when deciding which one to go for between NFT & Crypto.
Before diving deep into the article, you should know the basics of NFTs and Crypto.
Disclaimer: Before we begin, I would like to state that this is not financial advice and you should always be cautious & thoughtful before investing your hard-earned money into any asset or investment plan.
What is NFT?
NFT stands for Non-Fungible Token.
Non-fungible means something which cannot be replaced by another identical item i.e., something which is not mutually interchangeable.
Therefore, an NFT is a unique and non-interchangeable unit of data stored on a digital ledger, called a blockchain, which can be sold and traded on digital markets.
An NFT can be associated with a particular digital or physical asset (like a piece of art, a music album, or other types of digital files) and a license to use that asset for a specified purpose.
What is Crypto?
Crypto, crypto-currency, or cryptocurrency is a form of digital asset based on a network that is distributed across a large number of computers.
This decentralized structure allows them to exist outside the control of governments and central authorities.
Currently, there are many cryptocurrencies rolling in the market—Bitcoin, Ethereum, Dogecoin to name a few.
Difference between NFT and Crypto
The main difference between NFTs and crypto is that—NFTs, being a unique representation of real-world assets, cannot be traded with other NFTs.
On the other hand, cryptocurrencies can be traded for each other.
The future of NFT and Crypto
NFT in the future
The future performance of anything can be determined by analyzing its past. So, let us do the same.
NFTs did not come up all of a sudden, rather it is an innovation that has been worked on for several years.
- 2017: NFTs first gained widespread public attention with CryptoKitties, a project in which clients breed and sell digital cats.
- 2018: The emergence of a mini-hype led to investments led by venture capital, and platforms for buying, promoting, and minting NFTs have been created such as SuperRare, OpenSea, Rarible and Nifty Gateway.
- 2019: Such huge manufacturers as Formula 1 and Nike entered the market.
- 2020: NFT market tripled to $250 million.
- 2021: In February only, the top ten NFT collectibles marked an overall 400% increase in sales from the previous month, accounting for nearly $400 million in gross sales.
Also, the rise in the popularity of cryptocurrency has provoked curiosity for a different type of digital property.
After studying the information given above it is clear that the craze for NFTs is only going to increase in the future.
Reasons to invest in NFTs
Now let’s take a look at the principles that determine the value and development of NFT trends in the future—
Limited quantity
Many NFTs are unique or limited.
For example, CryptoPunks, one of the many first NFTs created again in 2017. Only 10 thousand crypto-punks were minted, each of which was a simple character with a set of distinctive features.
For any punk, you can view the full history of transactions in the past, including rates, offers, gross sales, and ownership data. At the same time, the price has steadily increased every year and with each new user.
Immutability
NFT code and metadata cannot be changed, which makes it persistent.
Transmission capability
The token can be resold to almost anyone around the world, which means it has a wider range of potential consumers.
Usefulness
Some NFTs can perform specific functions, generate income, or be exchanged for physical property.
Crypto in the future
We analyzed the past of NFTs and we will do the same with crypto to know its future trends.
In the last decade alone, cryptocurrency has proven to be one of the best and most profitable investments. Throughout 2021, the buzz around bitcoin and other cryptocurrencies didn’t die away.
- 2017: The cryptocurrency was hovering around the $1,000 price range at the beginning of that year.
After a period of brief decline in the first two months, the price charted a remarkable ascent from $975.70 on March 25 to $20,089 on Dec. 17.
- 2019: There was a resurgence in price and trading volume in June 2019, and the price surpassed $10,000, reviving hopes of another rally.
But it fell to $7,112.73 by December of the same year.
- 2020: The cryptocurrency started the year at $7,200.
At close on Nov. 23, Bitcoin was trading for $18,353.
- 2021: By March, bitcoin prices reached new all-time highs of over $60,000.
It eventually reached a peak of more than $64,000 on April 14.
The summer, however, saw prices fall by 50%, hitting $32,000.
The Autumn of 2021 saw a bull run, with prices scraping $50,000, but accompanies by large drawdowns to around $42,500.
2021 saw big names like Amazon considering bitcoin payments for product purchases. This will further intensify in 2022.
Also, ethereum is outperforming bitcoin in some aspects. Crypto experts predict that in the coming years, ethereum will surely take over the market capitalization and adoption rate of bitcoin.
Therefore, 2022 is expected to lay a strong foundation stone for that future.
Cryptocurrency in 2022 will experience massive growth with bitcoin, ethereum, Tether, and Cardano leading the wave.
Top cryptocurrency trades also anticipate a promising growth potential in 2022.
Reasons to invest in cryptocurrencies
Control over your assets
The quintessentially decentralized nature of crypto trading gives you control to own and store your assets without the involvement of a third party.
The value of the assets is not determined by the exchange, or a middleman, giving traders liberty to avail maximum profits from the prevailing exchange rates.
Good choice for long term investment
Investments in crypto can act as a reasonable source of savings post-retirement or give you some much-needed financial buffer during a sudden economic crisis.
Hence, they are seen to be extremely beneficial in the long run.
Deflationary assets
The limited supply of cryptocurrencies makes them deflationary assets.
Implying that their purchasing power increases over a period of time. Each cryptocurrency has an algorithm that puts a cap on its total supply.
Flexible and independent trading
The 24×7 accessibility of crypto trading makes it extremely flexible for traders to organize their trading during any part of the day.
Besides, there are several altcoins like Ethereum, Dogecoin, Ripple as well which increase the potential of gaining wealth and help traders diversify their portfolios.
By now, you have gained enough knowledge about both, NFTs and crypto, their pasts, future predictions about them, reasons to invest in them. But now, the question is which is best for you?
What to buy – NFT or crypto?
NFTs
Investing in alternative markets carries greater risk and less reward than money put into more mainstream places, such as equities.
The NFT market is largely speculative and probably will have wild price swings.
“There’s a high amount of risk,” says Nadya Ivanova, a close observer of NFTs at L’Atelier, an independent subsidiary of investment bank BNP Paribas. “The important thing to understand about the NFT market is it’s very new. And we’re still going through different cycles that are establishing what is the real value of something.”
Also, some critics believe NFT is just a hype-driven whim, much like the 2017 ICO bubble. Others say that the large influx of consumers and sellers will eventually diminish, and only truly unusual, interesting NFTs will retain their value.
Crypto
Cryptocurrency too definitely isn’t a sure thing—it carries a huge amount of risk.
Trading in cryptocurrency is kind of like gambling. Because it’s exchanged from person to person without any real regulations, there’s no pattern to the rise and fall of its value.
You can’t figure out the changes or calculate returns as you can with growth stock mutual funds. There just isn’t enough data, or enough credibility, to create a long-term investing plan based on cryptocurrency.
For investment purposes, cryptocurrency is not a good way to build wealth for your future.
Both NFTs and cryptocurrencies have risks associated with them.
But, the comforting point about crypto is that it is a bit older and known than NFTs. More information is available regarding crypto in comparison to NFTs.
In case you want to try your hands at NFTs then you must know that NFTs cannot be purchased directly from the paper currency of bank balance,
To buy NFTs you need to buy cryptocurrency first. Payment against the purchase of NFTs is accepted only in the form of cryptocurrency.
No matter, your final decision falls on the side of NFTs or crypto, you will have to buy crypto for both of them.
Final Thoughts
To be honest, you need to do proper research before going either of the ways. And this article was just the beginning of it, there is a lot more to know before investing in them.
If you found the information given here useful then please share this article with the people who might be searching for the same stuff.
