How to Choose Which NFT Projects to Invest In
There are tons of projects that offer their users a chance to buy NFTs, but not all of them are worth it. In fact, I’d say that the vast majority of them do not make for good investments.
Many NFT projects follow a pattern where there is a lot of hype around the launch and people rush into buying NFTs. Then hype dies down, prices fall, and there is a period where trading volume is much lower. After a while, some projects regain momentum through successful game development and community building, while most quietly die off.
This gives you a good idea of what projects are hot right now and should be looked at, but be warned- that volume can drop very quickly when hype dies down.
Once you have a project to evaluate, a factor to check is how activity is changing over time. Are the number of users and trading volume going up or on their way down? If you’re planning a short term trade you only want to be looking at projects on their way up.
It’s important to get an idea of how active and involved community members are with the project. Follow the project’s twitter, join the discord and telegram groups and read some conversations. Are there a lot of people discussing the project? Are they playing (and enjoying) the game or just sitting on the sidelines? These are subjective and relative factors, so it will get easier to evaluate after looking at several projects.