Investing in Blue Chip NFTs

With literally millions of non-fungible tokens (NFTs) in the market, it’s hard to know where to start as an investor. If you’re looking for NFTs to buy and hold for the long term, blue chip NFTs are one of the most popular ways to go. Like blue chip stocks, these NFTs are considered the crème de la crème.

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What are first-order NFTs?

Top-notch NFTs come from the most well-known and successful collections. They are considered industry leaders and are more likely to grow than other NFT projects. A top-notch NFT collection will have some or all of the following characteristics:

  • It is seen regularly in the NFT sales charts.
  • It has developed a popular brand in the NFT space.
  • The company behind it has strong financial backing.

The profile of blue chip NFTs is similar to that of blue chip stocks, but there are some important differences between them. Since the NFT market is not that old, even top notch NFTs have not been around for long. Blue chip stocks, by comparison, have a much longer track record of success. The NFT market is also much more volatile than the stock market.

Because of these differences, blue chip NFTs are much more risky than blue chip stocks. The best blue chip stocks are stable companies that have been around for decades. Some top notch NFTs have been launched as recently as 2021, and they come with a much higher risk of failure.

Blue Chip NFTs Explained

“Blue chip” is a term that comes from the game of poker, in which blue chips are most valuable. It is now used in a variety of fields to describe what people perceive to be the most valuable options available.

As stated earlier, there are blue chip stocks. There are also blue chip cryptocurrencies, with Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH) being the two that almost always make the cut. In professional sports leagues, such as the NFL and NBA, certain top-notch athletes are considered most likely to succeed at the next level.

It is important to remember that a blue chip is not a safe bet. Although some people view blue chip stocks as safe investments, which is normally true, there have been exceptions that have failed.

4 top notch NFTs

Prime NFTs come with a caveat for potential investors. NFTs in general are very high risk investments as the market is full of speculation and volatile prices. Prime NFTs can often be even riskier than the norm because some of them are extremely expensive. This means you have more to lose than you would with a cheaper NFT.

The advantage of top-notch NFTs is that they have a better chance of increasing in value. Most NFTs fail to build a brand, and top-notch NFTs have already. Here are the best blue chip NFTs to check out:

1. Bored Ape Yacht Club

Bored Ape Yacht Club is a collection of 10,000 digital apes, and owning one grants you access to an exclusive online club. They launched in April 2021 and originally cost 0.08 ETH each, or around $190 at the time. Within a year, they had logged over $1 billion in total sales, had become a hit with celebrities, and regularly sold for hundreds of thousands of dollars.

The price of Bored Ape NFTs puts them beyond the reach of most investors, but it is arguably the biggest brand in the NFT market. The company behind Bored Ape Yacht Club, Yuga Labs, has raised $450 million in funding at a $4 billion valuation and aims to build a media empire with its NFTs. He has also released more successful NFT collections including Mutant Ape Yacht Club.

2. CryptoPunks

CryptoPunks was one of the first successful NFT projects. Larva Labs, a two-person development team, launched CryptoPunks in 2017. It contains 10,000 unique numeric characters and is one of the best-selling NFT collections to date. Some of these NFTs have even been auctioned by Christie’s and Sotheby’s.

This is another pricey NFT collection, with many CryptoPunks fetching six-figure prices. The advantage with CryptoPunks NFTs is that they have a more established track record, even compared to other blue chips. They’ve been around longer than most and still consistently rank among the top collections in terms of sales volume.

3. Best shot in the NBA

NBA Top Shot is the official NFT Marketplace of the NBA, one of the first sports leagues to launch its own NFT platform. It allows fans to buy and sell official digital collectibles featuring NBA and WNBA highlights.

Unlike most NFT markets, NBA Top Shot does not require any knowledge of cryptocurrency; you can buy NFT there using your credit card. They’re also some of the most affordable premium NFTs, with prices starting at just a few dollars, though the rarer highlights cost a lot more.

The main selling point of NBA Top Shot NFTs is the NBA brand. There is a huge market for sports collectibles, and digital collectibles are likely the next evolution in trading cards and memorabilia.

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4. Art Blocks

Art Blocks is a unique platform that generates digital art on demand based on an algorithm. It was launched in November 2020 and several NFT Art Blocks have sold for over $1 million.

How Art Blocks works is an interesting mix of traditional art and blockchain technology. Artists who work with Art Blocks create a generative script and store it on the Ethereum blockchain. When a collector purchases an NFT from an Art Blocks collection, the seed data for that token interacts with the script and determines the appearance of the NFT.

There are many Art Blocks collections, and prices range from under $500 to over a million dollars. This gives investors plenty of options no matter how much they want to spend.

Blue chip NFTs are a good starting point for investors who want to explore options or simply learn more about the market. Another option, instead of investing directly in NFTs, is to invest in the blockchains on which these NFTs are built. Ethereum is most popular for NFTs, but there are other options including Solana (CRYPTO:SOL) and Polygon (CRYPTO:MATIC).

All crypto-related investments are risky, so what you choose depends on how much risk you are willing to take. For those who want a taste of the most beloved NFTs, the top notch NFTs are the ones to watch.

Lyle Daly has positions in Bitcoin, Ethereum and Solana. The Motley Fool has positions and recommends Bitcoin, Ethereum, Polygon, and Solana. The Motley Fool has a disclosure policy.

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