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Should you buy NFTS?

The headline-grabbing price tags attached to some NFTs are fueling the fire. However, prudent investors should tread very lightly when thinking about buying these assets because NFTs are highly illiquid and volatile. Buying them with the hope of achieving triple- or quadruple-digit price returns is not advisable.

Why are NFTS so difficult to trade?

Given its relatively immature state, the market for NFTs is not very liquid. NFTs are not widely understood and the number of potential buyers and sellers is small. This means NFTs can be very difficult to trade, especially during periods of distress. It also means NFT prices can be highly volatile.

Are NFTS a good investment?

When it comes to liquidity — how readily an asset can be exchanged for cash — NFTs are a lot more like baseball cards or paintings than bitcoin or stocks, because every seller needs to find a buyer who's willing to pay a certain price for a particular, one-of-a-kind item.

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