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NFTs became extraordinarily popular in 2021 thanks to online marketplaces where users trade these assets. NFT marketplace OpenSea estimated that NFT selling reached its climax in June 2021, where it recorded a staggering $160 million sales.
Meanwhile, nunFungible.com stated that the number of NFT buyers even surpasses the number of sellers at some point. This is the main reason why the prices of NFT items skyrocketed to the moon in 2021.
As an investor, you have at least two options to take advantage of the NFT trend. You can either engage in NFT collection after individual NFT collectible items or buy stocks with NFT exposure. Because the NFT market is very young, its future is uncertain. If you invest in NFT stocks, many of them are still affordable at this point.
If you want to engage in NFT stock investing, now could be the best time to do that. In this article, you will learn our top three picks of the best NFT stocks to buy in 2022. You will also understand what NFT stocks are and consider when investing.
What are NFT stocks?
You must be familiar with NFTs already. They are digital items stored in a blockchain with serial numbers that make them unique to other similar items. You can buy them as collectible items if you want to take that route. One place where you can buy NFTs is OpenSea. Your other option is to invest in NFT stocks. You might ask what NFT stocks are.
NFT stocks are companies looking to engage in NFTs either by creating and releasing their own NFTs or providing infrastructure to companies that make them. If you choose to buy NFT stocks, you can engage in the NFT phenomenon without owning NFT items. This is what investing in NFT stock means.
The good news for investors is that more and more companies are going into the NFT space. One reason is that companies want to expand their business reach and join the trend. The growing interest in NFT leads to the creation of innovative ideas to harness the power of NFT and blockchain. You might see more companies taking part in the NFT revolution shortly.
Sample NFTs in OpenSea
How to buy NFT stocks?
Buying NFT stocks is like purchasing any stock. You must open an account with a broker that offers NFT stocks to get started. The real challenge is selecting NFT stocks to include in your portfolio. Many companies are already working in the NFT sector, and more companies are looking to engage.
Therefore, you must select and allocate funds wisely. You can start your search on NFT stocks that are making the buzz lately. What are the hottest NFT stocks in the market right now? Create your list and start culling through the elimination method. Some of the things to consider are the following:
- Market cap
The bigger, the better.
- Current price
Buy cheap stocks with great upside potential.
- Projects
Find stocks with ongoing projects in the pipeline that you think have important use cases.
- Technical outlook
If the stock has been around for a while, look at the chart to see if the trend is looking good and you can buy at value areas.
Top 3 best NFT stocks to buy in 2022
Three of the hottest NFT stocks of today are listed below. Keep them on your radar in 2022.
No. 1. Twitter (TWTR)
Price: $39.67
EPS: -0.23
Market capitalization: $34.559 billion
TWTR stock price chart 2014-2022
Twitter is a social media site that allows users to post short tweets, such as texts, images, or videos. This company entered the NFT landscape when the former CEO Jack Dorsey sold his first tweet for over $2.9 billion. By the end of June 2021, Twitter finally started its embarkation in NFT production.
Twitter stock summary
While Twitter is ranging on the yearly chart, it presents a bullish setup on the weekly chart. As you can see below, price prints a bullish market structure, a step-up ladder formation. The price might be sitting on a demand zone right now (see horizontal box below). The stock might be at a discount price right now, making it a good buy.
No. 2. CloudFlare (NET)
Price: $107.00
EPS: -0.70
Market capitalization: $42.31 billion
NET stock price chart 2019-2022
As a cloud service provider, Cloudflare supports other businesses by offering services such as website development, content delivery, analytics solutions, and more. While the company is not directly involved with NFT, it helps content creators publish their NFT creations through Cloudflare Stream.
Cloudflare stock summary
Cloudflare became public in September 2019. Since then, its stock price slowly but steadily climbed until it peaked at $221.64 in November 2021. At this point, the price is correcting and has lost around 41 percent in value from the peak price. Overall, the market structure is bullish, and you can see this even on the daily chart below. Buying this stock right now could give the best entry possible.
No. 3. Mattel (MAT)
Price: $22.25
EPS: 2.28
Market capitalization: $7.553 billion
MAT stock price chart 1977-2022
Built-in 1945, Mattel makes and sells toys. The toymaker created and popularized the three products UNO, American Girl, and Barbie. The company inked a deal with WAV blockchain to enter the NFT space by selling its Hot Wheels Garage series. With this project, Mattel issued 40 Hot Wheels cars and sold them at an initial $15.
MAT stock summary
The daily chart of Mattel below shows a range-bound market. The same is true in the yearly chart. The good thing is that the price is closer to the lower boundary than the upper boundary. This could be an excellent time to buy this stock before sellers step in on the upper boundary of the range.
Final thoughts
The NFT industry is growing fast and does not seem to show any sign of exhaustion. The involvement of big brands, such as Nike and Apple, adds fuel to the fire, making the sector more appealing to investors. You might be able to have a good ride if you jump in right now. Just be aware of the risks involved in any investment, especially for new asset classes such as NFT. As always, diversify your portfolio and allocate a limited portion to NFTs.
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