Finding deals and learning how to flip nfts takes patience, dedication, and trading strategies. It can be frustrating finding nft flipping opportunities because it takes a lot of refreshing your browser on a secondary marketplace like Open Sea and evaluating multiple elements of an NFT project to determine if they would make for a profitable flip.
You’ll want to do your diligence before making those purchases, as risks are associated with flipping nfts. However, we will share 3-methods to use for flipping nfts to make a profit.
Also, what to look for when evaluating nft flip opportunities and when’s the right time to buy or sell an nft.
It can become a full-time position; however, the fun and entertainment it brings have the practice staying around. For starters, it will explain why you need a nft flipping strategy and the reasons for flip nfts in the first place.
Let’s dive in:
Why Flipping NFTS Is More Acceptable in Web 3
There’s been a shift from the stigma of flipping nfts to now finding creative ways to make money. For example, collectors are looking at flipping to build up a bank of Ethereum or other cryptocurrencies.
Or they are trying to learn how to flip nfts to get into blue-chip nfts like Cyberkongz and bored ape nfts.
Collectors of nfts get involved due to three reasons:
1. Exclusive perks, benefits, or engaged communities.
2. To make money through investing or as a side hustle.
3. Fear of missing out (FOMO).
However, when it comes to flipping nfts setting a clear goal and purpose behind your flipping efforts helps create discipline, which will help create greater profits when making deals. For example, if you know you’d like to make more than USD 300 on one flip… you’ll want to look for nft projects where you can flip an nft for more than .01 (since at the time of writing, this ETH is 3,000+).
It’s true flipping nfts won’t make you rich or millions, and it requires a lot of talent, skills, and knowing what to look for to be successful at it. Learning how to flip nfts will take time and research. Here’s a great video about the process:
However, those that start with taking the risk of flipping nfts, especially more minor projects, will gain valuable experience with the technology.
NFTs technology remains highly favored that it will revolutionize how we exchange, trade, or buy and sell goods globally. That experience will only make you better in time and prepared for the future.
3 NFT Flipping Methods for Increased Profitability
Floor Price Flipping – Method #1 On How To Flip NFTs
Floor price flipping requires looking for the lowest priced nft and selling it for more. To make a profit, it’s the art of finding low-priced nfts and quickly selling them at a multiple of 2x or 3x plus. Interest in the price from an emotional perspective is minimum or low.
Typically, flipping nfts is from a short-term perspective. It’s primarily focused on finding flipping opportunities faster than others and making money online.
Not looking to get insider information or hope an influencer or celebrity will pump up the Project and overall status.
Instead, you are looking for someone who’s selling an nft that’s cheaper than what it’s worth.
Someone would sell an nft for a lower price because they don’t know what they have, or they are in a rush to sell the Project and get their money back.
Go to Open See and filter for ‘Buy Now’ and ‘recently listed.’
Looking for any nfts worth .18 or cheaper in ETH
Rare Trait Flipping – Method #2 On How To Flip NFTs
I am trying to find NFTs with rare traits that are cheaper than other nfts with those rare traits.
Analyze ‘Properties’ to determine if those traits are valuable or rare. Or go to Rarity Sniper Tool and determine the most desirable traits for that particular nft project.
It will require more effort, time, and skill to understand which traits are most desirable for other collectors.
Be aware of Trait Sniping.
Allows people to snipe rarity/traits before revealed on OS. It usually has to do with the Project pushing contract data before the OS data and giving people a window of time (hours or days) to snipe.
How To Prevent NFT Trait Sniping In Your PFP Project | by Justin Hunter | Pinata | Medium
To Be Sold Out NFT Flipping – Method #3 On How To Flip NFTs
Find projects that still allow collectors to mint an nft because they are new and just started. It hasn’t sold out yet, so you can get in early by finding nft projects with at least 33% or fewer items left to be minted and get it for the final wave.
Then put those nfts up on open sea at the floor price, which will likely be higher than what it cost you to mint the nft.
What to Look for When Flipping NFTs
When you focus on making money via selling nfts in the short term, you need to evaluate projects from a non-emotional and logical perspective.
It requires asking questions to yourself and validating your thoughts based on data from secondary marketplaces and research.
Here’s a list of the best flipping nft questions you can ask yourself before purchasing an nft
1. Is the NFT Project Verified?
A verified project on Open Sea suggests over 100 ETHs sold on that Project. Therefore, it receives a ‘blue checkmark next to its name on Open Sea and is highly desirable.
However, be careful when buying from ‘blue check’ marked nft projects because scammers have learned how to manipulate it to verify their fake projects.
Your best way of preventing buying a fake nft comes down to checking contact addresses and using direct links from their official website.
2. Is the NFT Project an Affordable Price?
Are these nfts within your budget, and have you considered gas fees within your budget.
For example, you may budget $75 in gas fees for the purchase and another $50 for when you plan to list it. You may also need another $40 for when the price of gas fees needs to be adjusted.
3. What is the Floor Price?
Floor Price is the lowest price an nft collection is listed and available on a secondary marketplace like OpenSea and Rarible.
Analyzing the 7-day rolling average floor price over time determines how the nft collection performs and if it increases in value over time.
You can understand if it’s the right time to buy an nft that may be undervaluing or if you should wait before getting in.
Also, if you’ve recently bought at a low floor price like .02 and then it became .035 or closer to 1 ETH, that’s even better because it means you’ve made a profit.
Consider creating a dashboard where you can get the live floor price data daily for particular nft projects you are interested in flip.
4. What is the Trading Volume?
Trading Volume measures the frequency of buys and sells for that particular nft project. You can determine how often, and the number of times sold, which helps determine if it’s popular. Popularity equals demand, and when an nft is in high demand, it sells for higher prices.
Ask yourself the question, will the trade volume increase or decrease over time?
If you feel that the Project has potential and will keep trade volume at a high pace, it’s a good indicator that it’d be a reasonable price for flipping. On the other hand, if you feel that the project trade volume will slow down, as others will lose interest, then move on.
5. Will You Buy at the Floor Price or Ceiling Price?
Like buying stocks, you want to find the right price to get in. If it’s the bottom or the top of the going value, it’s safe to assume nfts can’t sustain high or low levels for a long time.
Figure out if you’d like to take the approach of buying at the bottom; while it’s not easy to determine when the bottom is, looking at the past floor prices will help make that decision.
You’ll likely want some insider info or a strong belief that the value will increase over time for buying at the top of the ceiling price.
6. Are These NFTS Considered Underpriced or Overpriced?
Find the maximum and minimum price of nfts within the collection and determine the average. Once you know these three numbers, you’ll be able to identify when an nft is underpriced or overpriced.
A watchlist in excel that you check every day a set of nft collections can quickly help manage and monitor these numbers.
7. How Much Gas Fees Am I Willing to Pay?
Setting aside a budget for gas fees will save you from a headache later when you are in a bidding war to get a highly desirable nft at a low price. Expect to spend anywhere between $25 – $80 in gas fees and it largely depends on if how much Gwei costs. In the example above, 35 Gwei wasn’t enough to get the transaction picked up by miners causing a pending transaction stuck on the blockchain and that required spending more money on gas by adjusting it with another transaction.
8. Is This NFT Project Well Known?
Go to Facebook groups, discord communities, or even your crypto friends to determine if the nft Project you are evaluating is well known. Sometimes when an nft project is not well-known, it makes it easier to purchase them at a low price; however, that increases the risk associated with the purchase.
Usually, you’ll want to look for well-known nft projects that haven’t hit their saturation point in the marketplace.
9. How Many Sellers Are There for This NFT Project?
The higher ‘volume of trades’ results in the likelihood they’ll change their prices to undercut you by selling at a lower price. Conversely, the lower volume of trader’s results in the likelihood you’ll sell it easier since there’s more demand than supply.
10. How Many Items to Owners?
A ratio of 3 items to 1 owner indicates there’s a lot of interest in the Project. Owners are growing, and plenty of items are still left to get in at a reasonable price.
Learn The Difference: Are You a Holder or Flipper?
Understanding how you like to buy and sell nfts is essential for not letting your emotions get the best of you. It’s risky and always remember to make the best decisions for you. (This is not financial advice, strictly for entertainment purposes).
HLD is the abbreviation for ‘Hold,’ When an nft collector decides to keep their nft, they are considered a ‘holder.’
Flippers buy nft projects at a low price and sell them at a high price simply because they want to make money.
For example, Funko nfts has a subset of collectors who do not want to redeem physical pops and would rather sell the funko nft before it loses value.
What Steps To Take After Evaluating An NFT Project To Flip
Lastly, we wanted to mention the steps for getting started and putting your flipping business into action. Learning how to flip nfts requires dedication and managing your risk.
Here are some tips once you’ve determined which Project you plan to flip
- Start by purchasing it and sticking to your budget.
- Relist the purchased nft for a higher price.
- Promote the nft on your social media accounts.
Remember, if you are flipping nfts on Ethereum, you’ll need to pay gas fees for any transaction you make, and that also relates to the activity of ‘changing your nfts listing price.’
It’s all about making a quick turnaround and making a quick sale. Once you’ve made a sale, it’s rinsed and repeated! Discord is a great place to let others among the nft Project that you have an nft for sale. Also, it makes sense to buy a few of the same nft projects because that shows to other community members that you aren’t only in it for the money.
It doesn’t take much to get obsessed with the act of flipping nfts; however, always be prepared for financial losses. Only put-up money you are willing to lose and work towards removing any risks or minimizing them as much as you can.
After you’ve made some sales using the three methods about flipping nfts, you may come to realize that flipping isn’t for you. However, it’s a reality that exists and is acceptable within the nft community.
If you’ve enjoyed reading this article and learning how to flip nfts or find nft opportunities, you may also like these:
- How to Start Selling NFTs on the Blockchain
- How to Evaluate Rare NFTs Quickly & Easily
- Where to Find Free NFT Drops to Sell for Millions