It's difficult to determine how many NFTs will be winners, but it will likely be a small number. In this video clip from "The Crypto Show" on Motley Fool Live, recorded on May 18, Fool.com contributor Travis Hoium highlights some important tips to consider when looking for a successful NFT project.
Travis Hoium: I think the commonly said thing in the NFT space is 95% of NFTs are probably going to zero. It's the 5% that aren't that are going to be the huge winners over time. Look, I have no idea whether a Bored Ape is going up versus a crypto punk. The profile pick NFTs are not really where I spend much time because that's not a place that I feel comfortable ascribing any value. Whether you ascribe that value to branding or art or what have you, I want to see the real utility that's being built.
I had a discussion with Dan Caplinger on Twitter over the last 12 hours or so. He was asking some of the similar questions and I said, "Well, here's a project where there's a real company, here's what they're doing with the money. Here's how you can see it on the blockchain." Those are the things that I think are really interesting, is what is really being built that's very real?
Those things exist, you have to search for them often which is really hard. This is not the stock market where something is going to be a $5 billion dollar valuation. The value of all of the NFTs and a really great project may be worth $500,000 and so the scale of the investment here is different, but that also creates a lot of opportunities for innovation because somebody can come up with an idea, pull together a team of two or three people, and create a really great business and a great NFT project with that as its backbone.
I want to just highlight that, be willing to explore what's going on there. You don't have to buy into it. Let me take those risks, maybe [laughs] and I'll lose on those, but I think there's a lot of interesting things going on.
