The field of non-fungible tokens continues to thrive and new projects are popping up daily. One trader, however, recounts how he turned $2,000 into nearly $500,000, filling NFTs without worrying about tedious whitelisting and fresh mints. Here is the story of how he did it.
The NFT Game: It’s Not Always a Get-Rich-Quick Scheme
Many of those who’re stepping into the world of non-fungible tokens (NFTs) are immediately flabbergasted by success stories of someone who bought a Bored Ape NFT for less than 1 ETH last year and is currently sitting on hundreds of thousands of dollars. It may not necessarily be an ape – it could be a punk, a clone, a dragon, or whatnot.
The thing is, a lot of people tend to believe that the only way to profit in the world of NFTs is to either be the creator or get in early. Still, those of you who have played the whitelist game surely know how tedious it can be.
What if there was another way? What if there was a way to earn without keeping your fingers crossed on a whitelist? Well, according to this one NFT trader – there is. In a detailed Twitter thread, the user going by the handle @CirrusNFT revealed how he turned 0.6 ETH (less than $2K at the time of this writing) into 150+ ETH (around $500K).
First – he explained how at first he was blindly jumping from one spin-off project to another – risking the majority of his bankroll on a “simple flip gone wrong”. It was then that he decided to embark on a unique, established and reliable project. This, for him, was the famous Lazy Lions NFT collection.
He explained that the current floor price for the project sits at about 2.5x what it was last August – when he started, to highlight that these projects don’t necessarily need to go parabolic to be successful.
The Secret Sauce: Consistency and Knowledge
Every NFT, regardless of its collection, has certain traits that make it rare. Cirrus said the first step to start trading is to spend enough time studying traits and making sure you know how to value them correctly.
Once he would get enough confidence and spot a good deal based on the above information, he would start making his bids. In his thread, he also shared some tips and tools that traders can use to make their lives easier.
He also revealed that a lot of people are unaware of some basic market features:
I’ve realized that a shocking amount of people don’t even know the listings page exists… You can view real-time sales and listings as they come in… This page is your textbook, study it nonstop.
Cirrus also revealed that he would look for quick sales early on and would only buy if he thought “there was a 75% chance I could sell it at a profit ON THE SAME DAY”.
Then, once he was able to compound his gains a bit and he could afford to buy multiple NFTs at the same time, he realized that liquidity is the name of the game.
Liquidity: The Lion King
The trader revealed that “as long as I could stay liquid enough to snipe 1 or 2, I could aim a little higher on my sales. The trick is to strike a balance between pricing your sales and always having availability of ETH.
It’s almost always the wrong move to be all in. A slight downturn in the collection’s floor price could burn you badly in the short run, and on top of that, you won’t have any ETH available to buy the deals from the panic sellers on the down turn. – He said.
As any experienced trader would suggest, he found the times for FUD and panic the best times to get good deals.
Buy fear, sell hype. – He argues.
Trust is paramount
Each product has its own community, and they are usually on Discord. This is also where there is a sales channel where people can trade with each other without having to go through a marketplace like OpenSea which would charge high fees.
By the way, if you’re new to buying and selling NFTs on OpenSea, we have a detailed guide written on the matter.
Either way, to make these OTC transactions, however, he had to build trust by posting regularly and contributing to the community. This would save him a ton of money on fees. However, it is essential to note that private trade is extremely risky and should only occur with counterparties whose reputation is proven, established and consistent.
In Conclusion
All in all, this story tells us that there are plenty of opportunities for everyone who is willing to dedicate time and effort to anything, be it flipping non-fungible tokens.
Of course, none of the above should be construed as financial advice. Trading NFT, like trading anything else, involves serious risk of capital loss, and you should never risk more than you can afford to lose.
