How to Flip NFTs in 2022 ($3K in a Day?)
So, you’ve read all the headlines of people making hundreds and thousands of dollars flipping NFTs. And now you wanna give it a shot too, but you don’t know where to start.
Buy an NFT at a low price and sell it for a profit – this is how you essentially flip NFTs.
However, it’s a bit of an oversimplification. But no worries. Whether you’re a complete beginner in NFTs or just new to flipping, this guide has everything you need to start your flipping journey.
Two Ways to Flip NFTs
There are many ways you can flip NFTs, but most of them roughly fall under either one of these two categories –
Get Whitelisted
Whitelists are where you’ll earn the most profit. It’s the easiest and almost guaranteed way to make significant gains flipping NFTs.
But what are whitelists?
In simple words, whitelists are a group of loyal fans and supporters of a particular project who get guaranteed access to mint or buy NFTs before it reaches the public market.
This is where you can buy NFTs at the lowest price, sometimes even for free, and then sell them for huge profits.
However, this approach to flip NFTs by getting whitelisted requires a lot of time and commitment, which many people with daily jobs, colleges or families may not have. So, it’s definitely not for everyone. But there are ways you can work around it.
How to get whitelisted for different NFT projects?
Every community has a set of mostly similar criteria to get whitelisted. You can look up the criteria for a specific NFT project on their discord or Twitter.
Mostly these criteria include – engaging in meaningful conversations with the community, providing value by asking interesting questions or answering other people’s questions, sharing resources, inviting more people to their discord, etc. Sometimes, it also includes fan art contests and quizzes.
The founders and moderators will reward these contributing members of the community by adding them to the whitelist.
It’s easier to get whitelisted in some communities than the others. Usually, more established or popular projects are harder to get into.
Nonetheless, this is how this method works – get whitelisted for promising NFT projects, more on how to find these later in the article, buy low and sell high at secondary markets like OpenSea and NiftyGateways.
It’s the best way to flip NFTs if you don’t have a lot of bankroll upfront but have a lot of free time.
Buy on Secondary Markets
As we said before, not all of us have time to do all that. So, what can the rest of us do to flip NFTs profitably?
Don’t worry. Even if you couldn’t get yourself whitelisted, there’s still hope.
Some strategies involve buying NFTs on the secondary market and selling them for a profit. However, profits may be less and much harder to get. Plus, it requires a better understanding, knowledge and experience with floor prices, performance, rarity, etc.
We can’t get into the depths of it here. Otherwise, it would turn into a whole different guide on how to read these signals, but on a surface level, this is what you should look for –
First off, what’s the floor price?
It’s the lowest price someone is willing to sell an NFT for. Generally speaking, the higher the floor price, the higher the demand.
Some examples of NFT projects with high floor prices are Bored Ape Yacht Club, Cyber Punk and Doodles. These are called “blue chip” NFTs and cost hundreds and thousands of dollars. If you’re a beginner, you probably can’t afford them anyway, so stay away from them for now.
Instead, go for projects with a low-to-mid-range floor price.
However, the floor price isn’t always a good indicator of an NFT’s true worth because it can be easily manipulated. So, what you’re truly looking for is an NFT with a stable floor price.
If the floor price of a particular NFT project is too volatile, it’s a huge red flag.
Next, look for trade volume and liquidity.
A good stable floor price doesn’t mean anything if there’s not enough trading volume. So, the higher the trade volume, the better.
You always wanna put your money in projects with high liquidity, so you can opt-out whenever you want.
Ideally, you should sell your NFTs as soon as possible. But of course, there are always exceptions.
The last part of the equation is the rarity.
Pretty self-explanatory. It shows how rare an NFT is. Getting good at analyzing the rarity of different NFTs will take quite some time and experience. So, just be patient with it.
Next, go to the listing page and use these metrics to study different projects and their performances and find the ones that you think are most profitable.
Here’s a good Twitter thread by Cirrus explaining flipping NFTs on the secondary markets and how to snipe good deals.
You can flip NFTs on the secondary market, but it’ll require more practice, experimentation and money.
How to Find Promising NFTs to Flip?
Now you know how to flip NFTs. But before flipping, there comes the most crucial step, and it’s to find a promising NFT project.
There are hundreds of new NFTs minted, and thousands are sold every day. Many are worthless, some are scams, and very few are actually decent enough to be profitable. And finding them is the hardest part of the job.
We have laid down the most important factors that you should consider and evaluate while looking for a profitable NFT project.
Art
The first and most obvious factor you should consider is the art itself. Yes, art is subjective, but make sure it’s not something that doesn’t make any sense. Make sure it’s not totally wack or lame.
Only buy NFTs with decent artwork that you actually think is good.
Community
Find NFT projects with strong communities.
How to identify a good community?
Look for good organic engagement on Twitter and their Discord channel. Make sure people are actually engaging in conversations on Discord, commenting, liking and sharing posts on Twitter.
Make sure people are actually excited about the project and believe in it.
Many NFT projects buy bots to increase engagement on Twitter and Discord. Look out for them.
Background
Next, research the founding team of the project.
Look for past work records. Have they done anything art-related before? Have they created any successful projects in blockchain or NFTs before? What are their qualifications and expertise?
You can easily find these out with a little bit of research. Mostly, this information is already made available to the public by the founders.
But you can do your own research or cross-check by checking out their different social media handles, like LinkedIn, Instagram, Twitter and whatnot.
Some projects have anonymous founders. Stay away from these projects at all costs. Most of them are scams.
Roadmap & Utility
The roadmap is upgrades and features that the project is planning to add in the future. You can easily find the roadmap on their official website.
Some NFTs have goals of adding staking, making video games and much more. Do your own research and see if the roadmap looks promising and ambitious. It’s a good sign of profitability.
However, also be cautious of roadmaps that are way too ambitious. Often, these projects over-commit at first and then fail to deliver. So, look for realistic and achievable goals.
The utility is the perks and benefits that the NFTs provide. One popular example is Gary Vee’s VeeFriends. It offers a chance to meet Gary Vee in person.
You wanna look for utilities that are actually beneficial to people.
Bonus – Association
Association is a good way to find great NFT projects.
Association with celebrities, influencers, or prominent figures within the NFT space will almost always turn out to be profitable.
For example, Frank Miller, a popular comic book writer, released his own NFTs. These NFTs are valuable because of the brand value associated with the creator itself.
Another such example is the Bored Ape Yacht Club NFTs that have been bought by many mainstream celebrities and rappers.
However, these are also projects that will be considerably more expensive.
Where to Flip NFTs?
You can flip NFTs on secondary markets like OpenSea, NiftyGateways, Rarible, etc. You might wanna check out our list of best NFT art marketplaces for this.
Or you can do private deals.
You can find buyers for private deals on different Discord and Telegram channels.
The benefit of doing private deals is that it saves you a lot of money that you would have otherwise spent on gas fees and other costs on NFT marketplaces.
The only caveat is that you need to build trust and reputation within that community first so people can trust you with their deals.
You can work around this by using an escrow service in the start, and slowly, as you build more trust and reputation, you can do without them.
Now that we’re familiar with the fundamentals of flipping NFTs, here are some tips that will massively help you cut short your learning curve.
Sell Before the Reveal
If you’re going down the whitelisting route, here’s a quick tip that will help you bag huge profits consistently.
Right before the launch on public platforms, there’s a period when the NFTs are available for sale, but the artwork itself is not revealed yet. This is when the floor price goes through the roof before it comes down to a more realistic number once the artwork is revealed.
After the reveal, people realize the NFT’s true worth, and they realize that it might not be as rare as they initially thought, or not that good or whatever, so they sell it off.
If you already bought a few NFTs from being on the whitelist, you can use the time window before the reveal to sell your NFTs for much higher profits than it would be possible to after the reveal. And you can do that almost every time with every project.
Join a Group or Community of Flippers
Joining a group with other flippers will save you tons of time and mistakes that you would otherwise make.
Joining one of these groups or communities will help you save time finding good NFT projects and resources.
Plus, it would also help save time in researching as you’ll almost always find someone who has already done the research.
Just don’t be the guy who always takes value from others and never provides any.
If You’re New, Start Low
This is pretty basic advice but still worth mentioning. If you’re totally new to flipping NFTs, start low, probably less than 0.05 ETH.
Assume that you’re gonna lose money on the first few flips. Treat them as experimentation. The last thing you want is to lose a ton of money experimenting. So, always start low.
You can gradually increase it as you gain more understanding, experience and confidence in what you’re doing.
Lastly, the golden rule of trading also applies here – only put money that you’re willing to lose.
Find a Niche
The best NFTs to flip are the ones that you’re interested in and know a good deal about.
When we say find a niche, we mean to find a particular art style, theme, project or community type that you’re comfortable with and are passionate about.
If you invest most of your time and money in projects and art that you don’t really care about, you’ll do a poor job at researching and analyzing.
As you become more advanced, instincts will play a huge role. So, you wanna develop your instincts for a specific type of art.
Final Thoughts
People are making big banks flipping NFTs. You can do that too. But it requires patience and a lot of trial and error.
Other than that, you also need to be aware of taxes when flipping NFTs. Here’s our NFT tax guide. You can read it and understand how NFT taxes work.
Good luck with your flips.