NFT Versus Cryptocurrency: Which is More Profitable

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Last Updated on January 17, 2024 by newseditor

The last decade was characterized by crypto’s immense success. Going into this decade, crypto is still waxing strong. Crypto’s popularity in the past ten years cannot be overemphasized. It paved the way for other financial innovations and made financial services more accessible. These features have driven crypto’s widespread adoption. However, another modern investment innovation became highly popular in 2020. This innovation was the NFT

While the history of NFTS can be traced to the crypto kitties in 2017, NFTs became a household name between 2020 and 2021. This explosive popularity significantly increased the overall value of the NFT market. For instance, the NFT market was valued at $15 billion in 2021. This shows that NFTs showed immense promise at their peak. 

However, despite the popularity of NFTs, the crypto market also remained a viable investment option. Crypto adoption increased in 2021, and Bitcoin recorded a significant all-time high value of $60,000. 

In recent years, the market has become increasingly bearish. Thus, investors’ trust in the general market (including crypto and NFT) seems to have waned. This situation has raised important questions on profitable investment options for investors. 

NFTs or Crypto: The Most Profitable Option for You

NFTs and crypto are undoubtedly profitable. Many artists have profited massively from the NFT wave. For instance, Beeple sold his art NFT for a whopping $69 million. Similarly, many crypto investors have made huge profits from bull runs. Bitcoin increased by over 900 percent between 2020 and 2021. Investors that held crypto within this period would have gotten unbelievably high returns from their crypto assets. 

However, the market is no longer what it was in 2021. We are experiencing a bearish run in the market. Bitcoin’s value at the time of writing this article was $28,000. No doubt, this is a significant drop from the all-time high recorded in 2021. 

The NFT market has also been affected. Perhaps, even more drastically. Many NFTs have experienced a significant value drop in recent months. A primary example is Justin Bieber’s investment in a Bored Ape NFT. At the time of purchase, the NFT was worth $1.3 million. However, following the FTX crash, its value dropped to $70,000. This trend can be ascribed to the reduced confidence in NFTs across the market. Some investors perceive NFTs as a bubble that has ultimately deflated. 

On the flip side, while the crypto market has largely been bearish, there is potential for recovery. This is because there is growing interest in crypto across the world. Residents in countries like Lebanon, Iran, and Nigeria still use crypto to hedge against high inflation. Also, crypto has been in existence for over a decade. During this period, investor confidence in the asset has gradually increased. This means that there are profitability prospects for crypto holders. 

While some NFT projects are still profitable, there are skimmer chances for the NFT market to replicate the 2021 wave. Thus, while NFTs still have potential (due to their use cases), crypto assets are still more profitable for investors. 

Conclusion

One primary consideration for investors in the current market should be risk tolerance. Before deciding to invest in either NFTs or crypto, try to determine your risk tolerance. This will help you opt for NFTs investments best suited to your needs. 

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