From sports trading cards to books, artwork, automobiles, jewelry, and now NFTs — people have always had a penchant for collecting things.
But what we haven’t always had is an outlet for organizing all of these collectibles so we can keep track of their ever-changing value and understand their impact on our estates and net worth.
For years, paper as well as digital spreadsheets have been the bandaid.
But today, we have a real solution.
So let’s talk about that solution — an alternative asset tracker like Kubera — as well as why it might be time to invest in NFTs and how exactly to get started.
What is a Non-Fungible Token (NFT)?
If you’re seriously considering adding NFTs to your portfolio, it’s important you understand the basics first. So let’s take a sec to talk lingo and background before getting into the tactics.
You might know by now that NFT is short for non-fungible token. But what the heck does that actually mean?
Fungible means swappable, therefore non-fungible means unswappable, unique. It’s this property that lies at the core of what makes NFTs tick.
Despite the jokes you may have heard about copying digital art from the internet instead of paying for an NFT, NFTs are not just digital pictures or files. NFTs are actually digital tokens, just like the name says, that are linked to digital and even physical properties. Each NFT has a unique identifier programmed into it. It’s this identifier that makes their ownership traceable. NFT tokens are created (or “minted” in NFT-speak) using blockchain technology. Blockchains are distributed databases that record transactions without the need for oversight. The Ethereum blockchain (home of the Ether or ETH coin) is where the vast majority of NFTs “live” today, in 2022.
Though NFTs actually got their start close to a decade ago (check out our brief NFT history rundown here), they are still most prominently used in the art space. A pertinent example is Beeple’s Everydays: The First 5000 Days, a digital collage that was sold for $69 million in 2021 at Christie’s auction house.
Almost any element that can be bought and sold via digital token can be represented by an NFT — written content, photos and illustrations, audio clips, video clips, real estate, physical and digital tools (like inside video games), etc.
NFTs vs. Crypto
NFTs and cryptocurrencies aren’t the same kinds of assets. However, they do have a lot of overlap.
NFTs can be thought of as a subset of crypto, since cryptocurrency typically has to be utilized to trade in the NFT space. Both asset classes are built on blockchain tech, so they operate using similar principles. Because of their similarities, NFTs and crypto both tend to attract the same audience, and news and events impact their values in parallel ways.
There is an interesting development on the horizon that aims to untangle the NFT-crypto web a bit. The cryptocurrency exchange Coinbase is endeavoring to launch an NFT marketplace that empowers folks to buy NFTs with Fiat currency, via credit card.
Why Modern Investors Should Consider NFTs
If you’re wondering what it is that makes so many modern investors interested in NFTs, here are some of the leading reasons to consider this asset class for your portfolio.
Protect Your Portfolio With Diverse Assets
For us, the opportunity for diversification has always been a top reason to get into alternative assets.
Alternative assets, like NFTs, usually have low to no correlation with traditional assets. When you’re invested in alternative assets, if the stock market takes a wild downturn thanks to world events, that doesn’t necessarily mean your portfolio has to follow suit!
A healthy blend of alternative and non-alternative assets makes for a balanced portfolio. It probably won’t skyrocket in value in just a few months, but it’s also unlikely to experience serious, permanent capital loss. Actually, it’s been shown that effective portfolio diversification leads to higher returns and lower losses over time.
Brush up on why diversification is king when you read our Modern Guide to Portfolio Diversification.
Collect Art in a Fresh Way
Like we said, lots of people are interested in the collection aspect that comes along with investing in alternative assets. Investing in digital collectibles like NFTs can feel a lot like collecting art.
Like art, NFTs come in a huge variety of styles, formats, and price points. And of course, each and every one is totally unique, just like your favorite classical paintings. We’ve even seen communities spring up for folks who have all collected NFT art from the same artist or in similar genres.
Adding NFTs to your portfolio doesn't have to feel totally strange and alien. Instead, it can just represent a more modern and approachable way to participate in a hobby you already love.
Support a New Generation of Artists
NFTs have also presented modern-day artists with an entirely new way to not only create but to make a living from their art — and that’s revolutionary.
Most of the time, when you purchase an NFT via an NFT hosting platform, you’re supporting the artist directly. These platforms give artists a way to get their work in front of more people, and make more money when they complete a sale. The fees associated with minting and selling NFTs usually top out in the hundreds of dollars, but traditional art galleries and agents can take as much as 50% of the profit on every work sold.
New Opportunity to Generate Short-Term Profit
We’ll usually say we’re more in the buy-and-hold category when it comes to investing. But even we can’t deny that NFTs offer an interesting opportunity to make some short-term flips and generate real returns.
Again due to their collectable status, NFTs can rise in value a decent amount over time — just like baseball cards or paintings. You might find an opportunity to offload one for more than you paid for it, generating some actual cash flow. That’s something not a lot of assets, and especially not traditional assets, can offer!
How to Get Started with NFTs and NFT Trackers
The world of NFT investing can feel a little foreign and scary before you get familiar with it. So at this point, if you feel comfortable enough, you might want to just go ahead and dive in with your first investment.
But remember to always follow the golden rule of investing, especially your first time around: never lay out more cash than you’re comfortable losing.
1. Research and Select an NFT Marketplace
We’ve alluded to this already, but NFTs are most commonly minted, bought, and sold on platforms called marketplaces. A lot of them are similar to Amazon, selling different types of NFTs from different artists, and even accepting different types of currency. Others hone in on specific NFT types. And others still work with only one type of existing crypto coin, or have created their own coin specifically for use in their marketplace. Consider this when shopping for the right NFT market for your first transaction.
If you prefer a specific type of NFT or even have a certain one in mind, you’ll have to use whichever marketplace it’s offered on.
Figure out where to start by clicking through some of these popular NFT marketplaces to see what strikes your fancy:
- OpenSea is the biggest NFT marketplace in 2022, offering NFTs using the Polygon blockchain
- Nifty Gateway offers mostly art-specific NFTs hosted on the Ethereum blockchain
- Rarible offers NFTs in various categories on the Ethereum, Flow, and Tezos blockchains, with more planned
2. Fund and Connect Your Crypto Wallet
To use most NFT marketplaces, you have to connect a crypto wallet, just like how you’d connect a financial account to Amazon.
If you aren’t already familiar, a crypto wallet is where you store your crypto coins. If you don’t have any of those yet, visit a crypto exchange to purchase crypto using Fiat currency. If you’re working with a marketplace that deals in a specific coin, make sure to add that coin to your wallet!
If you aren’t already immersed in the crypto world, there’s a lot to learn in this step alone. Take your time and get familiar by checking out our guide Managing Multiple Crypto Wallets: Everything You Need to Know.
3. Purchase Your NFT
This step may be pivotal, but it’s also simple. Time to hit that buy button!
NFTs that are sold at auction can fluctuate quite a lot in value, so double check that it’s still at a price you’re willing to pay before committing.
4. Manage Your New Asset with the Right NFT Tracker
Bam, you’re a new NFT owner!
Now, it’s time to start managing this new asset in light of everything else in your portfolio. How does it change in value? How does it assist with diversification? What’s the impact on your net worth? Does it look like it’s worth investing in even more NFTs?
These are all questions that get harder and harder to answer the larger and more diverse your portfolio grows.
Looks like it’s time to bring in the right tool for the job. So let’s get to talking about NFT trackers and helping you pick the best one to make the most of your awesome new asset.
Top NFT Portfolio Trackers to Choose From
To effectively manage a growing NFT collection, you can’t go wrong choosing one of the following portfolio trackers that we’re loving right now.
Kubera: Track Everything from Traditional to Digital Assets
Kubera is an extra-special entry in this category because it isn’t just an NFT tracker, it’s an everything tracker.
Kubera’s unique architecture makes it the only all-in-one personal balance sheet platform and wealth tracker that can help you monitor bank accounts, vehicles, real estate, Bitcoin, domain names, cash, gold, NFTs of course, and pretty much anything else you can own — all from one digital dashboard!
And, it does it all with style and ease. All you have to do to get started is first add the credentials for all your account-based assets (bank accounts, etc.). Kubera will display their value in real-time so you always know how they’re performing and impacting your portfolio.
Then, add the details for all your assets that don’t have a live digital account (cash, etc.). Kubera’s clean, spreadsheet-like interface makes it easy to keep these details up to date so you can also understand how these assets are interacting.
Finally, try out Kubera’s stock and crypto tickers as well as our integrations with leading value estimation platforms (Zillow, EstiBot, etc.). It’s easy to see that Kubera provides all the tools you need to monitor and manage your every investment.
For a high-level view and a deeper understanding of your portfolio, lean on Kubera’s charts and recap feature. We compile all your financial data instantaneously to provide a clear, granular view of how your assets and overall portfolio are performing.
Itching to see the return on your investments in NFTs and other assets? We’ve also automated that inside Kubera.
The only action you need to take is making sure the details of your assets are up to date, especially when it comes to purchase price, current value, and any cash that has been added to or removed from the asset. Kubera will then add in the time it’s held the asset to show you the internal rate or return, or IRR, for your investments.
And not only that — it will display your IRR in your currency of choice! This is especially valuable for assets like NFTs that are purchased in cryptocurrency, a factor that makes it hard to understand their value compared to the Fiat currency you use most of the time.
Kubera even provides a white-label solution for financial advisors and wealth managers, to aid them in serving their modern, tech-savvy clients — like you! — through a modern, tech-savvy client portal.
Dappradar: Track Your Portfolio and Immerse Yourself in the NFT World
DappRadar gets its name from the phrase “dapps” — a shortening of “decentralized apps,” which are apps that operate on a blockchain.
DappRadar calls itself “the world’s dapp store” where people can explore and trade all kinds of NFTs, DeFi assets, tokens, and more.
And not just that, DappRadar also has a portfolio tracking feature where those who trade on their platform can connect their crypto wallet to monitor the holdings within it, including NFTs.
DappRadar is a good tool for people who just want to track their crypto-based assets. It provides some basic insights into elements like net worth, but doesn’t really allow for much deep diving into performance analytics and can’t account for assets that exist outside of the crypto realm.
Value.App: A Minimalist Tracker That Focuses on NFTs
Even more laser-focused on NFTs is Value.app.
Value.app is an extremely minimalistic platform for doing exactly what it says on the home page — tracking the value of NFT portfolios.
To use it, investors just need to enter the 0x address or ENS domain name associated with their NFT portfolio. The platform will display each of the NFTs in that portfolio, along with their floor price. In addition, it shows users which NFTs from different collections they own, the 24-hour volume of these holdings, and of course their value.
Value.app is not meant to provide comprehensive portfolio tracking, but instead give devoted NFT collectors just the information they need to effectively invest and trade.
Choose Your NFT Tracker to Start Investing Effectively Today
Protect and grow your portfolio through creative diversification, support the arts world in a modern way, and even take advantage of a new opportunity to generate quick returns through NFTs.
But all of that is only achievable with an NFT tracker that makes not just NFTs but your whole portfolio of assets understandable and manageable.
Sign up for your affordable Kubera subscription today and sign yourself up for meeting your wealth goals by way of a modern, yet manageable, portfolio.