Over 64% Of People Buy NFTs To Profit, Survey Says
When it comes to NFTs, people who are not that actively immersed in the crypto space often ask one question – why?
Why would anyone want to spend hundreds, thousands, or even millions on a simple JPG, GIF, video file or anything else that is easily accessible to everyone on the internet? That you can simply right-click and save in no time or, better yet, take a screenshot?
To better understand the reasons behind NFT purchases, we've decided to ask our community on Twitter why they buy NFTs, how much they're willing to spend on them, and how their NFT journeys are going so far. Over 1,200 people participated in the survey, and the results are in – read on to find out!
Why are NFTs more than just basic JPEGs?
First, it's important to understand how NFTs work before going deeper into the reasons why people buy them. So let’s go through this real quick.
NFTs, or non-fungible tokens, go hand-in-hand with one very important concept – (digital) ownership. Yes, just by looking at it, it's impossible to distinguish digital art from NFT digital art since visually, there is no difference. The difference lies in the use of technology – blockchain, in this case – that allows people to prove the authenticity of a particular digital piece and allows them to actually own it.
Put simply – you can see and admire Mona Lisa in the Louvre, but it doesn't mean that you're the owner of that painting. It’s the same with NFTs – screenshot or save them as many times as you want, you’re still not the one who owns it if you can’t prove your purchase with the record on the blockchain.
TOP reasons why people buy NFTs: survey results
The technology behind NFTs makes them kind of a commodity that you can benefit from. To learn how and why people buy NFTs, let's go through the DEXterlab survey results.
1. To make money
Out of 1,318 people who participated in this poll, 64.3% said that the main reason why they buy NFTs is to make money.
Non-fungible tokens, as the name suggests, cannot be exchanged (like cryptocurrency, for instance). Each has unique characteristics and varies in rarity, which drives interest, and demand, and, of course, influences how much they're worth. This makes NFTs an investment that can later bring profits if you can grasp the value of a specific digital asset and make the right purchase decisions.
For instance, when the creators of Blocksmith Labs first launched their NFT collection in March, the floor price of their NFT was around 5 SOL. Those who managed to purchase it at that time, can now trade it for a whopping 130 SOL. That's a 26X increase in 3 months!
2. To become a part of a community and flex
The second most common reason why people buy NFTs, according to the survey, is to become a part of some community and flex. For 14.7% of people who participated in the survey, this is the key reason for purchasing particular NFTs.
People are highly social creatures, so the desire to be a part of a community and show off (your social status, who you are friends with, how successful you are, etc.) isn't really surprising. Besides, a strong community is one of the most significant advantages of NFT projects since active, friendly people and good engagement can set the foundation for the project’s success by building buzz and attracting new people, meaning you’re investing in something that can bring long-term value.
Additionally, community members who hold particular NFTs often have access to various perks. For instance, BAYC holders can access additional NFT collectibles free of charge or attend exclusive events.
3. Collecting digital art
Not that far behind in the list of the reasons why people buy NFT are digital art collectors, which makes 12.4% of all survey participants.
It‘s not that different from collecting physical art pieces – only with the blockchain technology and NFT surge, you can now own digital art, which was never possible before.
Besides, owning digital art opens more opportunities to support creators, engage with them and like-minded people on Discord groups, Twitter spaces, learn more about the story behind the digital art piece, and so on, strengthening the industry itself. Win-win!
4. Getting access to games and tools
One of the key benefits of NFTs is the value that comes with them, often in the form of membership rights that grant you access to creators' projects and the perks that come with them, be it a game, some tool, or anything else. According to the DEXterlab survey, 8.6% of people buy NFTs for this particular reason.
For instance, NFT-based memberships require users to hold a specific NFT so that they can get the best out of some tool and access functionalities available only to NFT owners. That could be anything from access to community servers, early mints, DAO, to actually buying a villa in Metaverse and becoming neighbors with celebrities.
How much are people willing to spend on NFTs?
If you've ever scrolled through a list of the highest-selling NFTs, you might have thought that NFTs are something you will never be able to afford. The truth is, although NFTs can be costly, you can still find options with good utility and are within the price range you find comfortable.
DEXterlab survey shows that the majority of people (48%) are comfortable paying anything from $50 USD to $500 USD for an NFT, which, for a regular person, seems like a fair price.
Interestingly, the second most popular answer, chosen by 25.5% of people who participated in the poll, is paying more than $2,000 USD for a single NFT.
15.2% of respondents don't mind spending $500-$1,000 USD on NFTs, while 11.4% are comfortable paying anything from $1,000 USD to $2,000 USD.
Is it always just sunshine and rainbows?
Turns out, not all investments in NFTs pay off. Although the primary reason why people buy NFTs is to make money, the majority of NFT holders who participated in our poll (58.3%) said that their NFTs haven't been that profitable so far.
On the other hand, 41.7% of respondents were able to make a profit from the NFTs they've bought.
Here are a few tips on what to look for when choosing what NFT to buy:
- Decide if the overall aesthetic is pleasing (in your opinion)
- Pay attention to the creators and the team – is it strong? Do they have the right experience? Clear goals? Is the team doxxed and public?
- Explore NFT utility and properties
- Explore the community – its size and engagement
- Check plans for airdrops
- Is the roadmap stacked?
Most importantly, don’t rush – do your own research before buying any NFT.
Many still don't get the value of NFTs and see no point in buying them, but it's usually the case only if you jump into anything fast without doing your own, thorough research.
When buying NFTs, be sure of the purpose of that particular NFTs and the value they can bring to you. Whether you want to make money, become a part of a fun and engaging community, grow your digital art collection, or get access to tools and games, always remember that there are also risks that come with NFT purchases, and you should weigh every decision that you make in order to achieve your goal.