Okay, let's talk NFTs. I’m Erik, and like many of you, for years I’ve introduced the public to confusing new tech. With them came the hype, the crashes, and everything in between, all of which I have witnessed on the frontlines of the crypto world. Truthfully, I’m done with the narrative that NFTs are only speculative JPEGs. It's dangerously wrong.

NFTs are about so much more than just this — I don’t even think of NFTs as digital art. Other projects are purely speculative in intent. Writing off the whole space due to a few overhyped ones is missing some great opportunities. Remember the dot-com bubble? Meanwhile, it erased hundreds of start-ups. That set the conditions for the rise of Amazon, Google, and the internet. NFTs are going through a similar evolution.

Forget floor price for a minute. Look at holder count. A project with a consistently stable or growing holder base, even when the floor price dips, is a sign of a strong, engaged community. This is your early warning system for rug pulls and your most powerful predictor of long-term viability. Think of it like this: it's like investing in a company with loyal customers. Even if the company stock price dips, those devoted customers will protect the business. For example, I exclusively use Dune Analytics to find tracking metrics like these. That’s the beauty of it, though – it’s raw, unfiltered data that cuts through the noise.

Technical analysis is useful, sure. Connecting line on the charts assists me in identifying possible buy zones. I supplement that with keen focus on important technicals such as the 50-day EMA. In the NFT world, sentiment is the real emperor. What are people saying about the project? Are they excited? Are they engaged? Are they building? Utilize resources such as LunarCrush to ride the waves of community sentiment. A simple Google Trends search can go a long way, though. It’s sort of like taking the temperature in the room at a cocktail party. You’ll know when the vibe is right, even if you never met half the people in the room.

This is where NFTs truly shine. Forget just owning a digital image. Consider what value that NFT brings to you. Does it grant access to exclusive events? Does it unlock metaverse real estate? Does it generate staking or rental income? It’s utility that cuts through the hype. It’s what changes an NFT from a speculative asset into a productive asset. Think of it like this: would you rather own a painting that just hangs on your wall, or a painting that pays you rent?

A strong community can weather any storm. I mean communities that organize to vote on governance, start their own DAOs, create their own buybacks and reward holders with their own airdrops. Azuki is a prime example. Their community-first, art-focused approach has not only stabilized prices but created trusted co-founding engagement. Compare this to projects where the community is just a bunch of people waiting for the floor price to pump. Those projects are ticking time bombs. A strong community truly is a well-oiled machine. Everybody’s pointed in the same direction, everybody’s trying to accomplish the same thing.

Here's an unexpected connection for you: NFT trends often mirror broader crypto and even stock market trends. Whether it’s Bitcoin’s upward or downward movements affecting NFT prices or the stock value of companies making plans to integrate NFTs, the connection is real. This opens up lucrative cross-market trading opportunities for those few skilled investors. Assuming we get ETH ETFs approved, that scale of institutional investment will undoubtedly flood in. Greater capital coming into this space will always increase quality liquidity for leading NFT projects. You know all those times people told you that crypto was uncorrelated with the stock market. Well, guess what? It's all connected. The bridge between tradition and new finance is pretty cool. That is all pretty convincing evidence that the market isn’t quite as irrational as some would have you believe.

At the end of the day, effective NFT investing is not about being led by the hype train. It’s more so about applying a data-driven approach, having a firm grasp on community dynamics, and being aware of the kind of inherent utility that NFTs can provide. It’s about not losing sight of the forest for the trees, and realizing that speculation is only part of that picture. Understand that the greatest investment opportunities are usually found when everyone else is running away. Grab onto those opportunities to differentiate yourself from the competition. And that, my friends, is how you actually discover value in the NFT ecosystem.

4. Communities Build Value, Not Hype

A strong community can weather any storm. I'm talking about communities that actively participate in governance, launch DAOs, implement buybacks, and reward holders with airdrops. Azuki is a prime example. Their community-driven initiatives have helped stabilize prices and fostered genuine engagement. Compare this to projects where the community is just a bunch of people waiting for the floor price to pump. Those projects are ticking time bombs. A strong community is like a well-oiled machine. Everyone is working together towards a common goal.

5. NFTs Mirror Broader Market Trends

Here's an unexpected connection for you: NFT trends often mirror broader crypto and even stock market trends. Bitcoin's movements can influence NFT prices, and companies integrating NFTs can see their stock prices affected. This creates cross-market trading opportunities for savvy investors. For instance, the approval of ETH ETFs will likely funnel institutional money into the space, boosting liquidity for quality NFT projects. You remember how everyone was saying crypto had nothing to do with the stock market? Well, guess what? It's all connected. Thinking about this connection between tradition and new finance, it is not hard to imagine that the market is not as irrational as some people are stating.

Ultimately, successful NFT investing isn't about chasing hype. It's about applying a data-driven approach, understanding community dynamics, and recognizing the inherent utility that NFTs can offer. It's about seeing the forest for the trees, and understanding that speculation is just one piece of the puzzle. It's about recognizing that, just like with any investment, the best opportunities are often found when everyone else is running for the exits. And that, my friends, is how you find real value in the NFT space.