Can NFTs Really Help You Grow Your Money?

(MoneyHippo.com) – People looking for ways to grow their money and increase overall wealth might look toward the digital space. Non-fungible tokens (NFTs) are assets on the blockchain, like cryptocurrencies, and a relatively new asset you could add to your portfolio. The question is: Are they a good growth investment? The answer depends on the NFT itself.

Unlike cryptocurrencies that can be exchanged one for another – Bitcoin for Bitcoin – NFTs cannot. These are unique art pieces, like a meme, painting, song, or video clip. In fact, any creator can make an NFT and put it on the blockchain for sale. If you buy an NFT, you’re purchasing a one-of-a-kind digital asset you believe will go up in value.

Just like any other investment, the asset may increase, stay the same, or decrease its worth. While it’s certainly possible to acquire a unique token that will increase in value, like NyanCat or a Shaq jump shot clip, there are no guarantees. Diversification is key for long-term investment growth, and NFTs would be considered high risk. If you have a place in your portfolio that can stand an extremely high-risk investment and the NFT is something you like, maybe add it to your asset collection. However, be sure it’s something you love because it might not hold its value. With that in mind, the average investor shouldn’t rely on NFTs for growth. Talk to a financial professional to see if they are the right choice for you.