How to Value NFTs - How much are NFTs worth? - Best sources and websites - NFT value calculations
Is there a Zillow for NFTs? NFT Value Estimator
How do you value an NFT?
Before trying to analyze how to value an NFT, it is important to first classify the different types of NFTs. NFTs are still in the infant stage and we haven't seen all the different possibilities. Here's a list of some of the most popular types of NFTs:
2. Meta Land
3. 1 of 1 artwork
4. Collection artwork
5. Utility NFTs
6. Membership exclusive access NFTs
7. Music NFTs
8. Ticket NFTs
9. Gaming NFTs
10. IRL token NFTs
For the majority of NFTs on the market, their value has been a result of speculation. Value can be calculated based on historical sale price, bid price, and listing price. All of these metrics can help pinpoint a range of value for an NFT.
The value of an NFT can change in an instant based on alpha (new information) about the project/collection/artist, etc. Panic sellers can crash selling prices. The sale price does not necessarily equate to the underlying value of an NFT. The sale price of an NFT can be over or under the value.
For example, if an NFT had a value of $1 USD, let's pretend the NFT could lock up $1 USD and the only way to retrieve the $1 USD would be to burn the NFT. Perhaps the NFT's underlying value would always remain $1 USD. But let's say that speculators and influencers start buying up this NFT and pay $2 USD. The sale price is now at $2 USD, while the underlying value is still only $1 USD. Therefor the Sale Price is higher than the value. The opposite can also happen. Let's say holder of this NFT panic or need access to cash fast, so they start selling for $0.50 USD. Now the sale price is less than $1 USD. Therefor the sale price is lower than the value. Hopefully this picture helps you understand that there can be a difference between the sale price and the value of an NFT.
One can also argue in the above example, that for a period of time (maybe long or briefly) that the value of the NFT was $2 and thus a buyer is willing to pay a higher amount. Normally NFTs are not so easy to value. Because a lot of value is based on many factors. Those factors can include:
1. Project founders and team
2. Roadmap (or lack there of)
3. Name recognition
5. Influencer or community members involved in the project