UChicago Professor's Paper: Six Methods to Profit More from NFT Trading
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UChicago Professor's Paper: Six Methods to Profit More from NFT Trading
6 Common Traits of Experienced NFT Traders
Navigating Web3 tides with focused insightsWritten by: Jason Levin
Translated by: TechFlow intern
Note: Recently, two professors from the University of Chicago published a paper titled "Investor Experience Matters: Evidence from Generative Art Collections on the Blockchain." By analyzing 692 NFT collections and over 300,000 wallets, they identified six common traits among experienced NFT traders. These strategies increase profit per trade by ~10%, summarized by Jason Levin.
Tip 1: Avoid projects with roadmaps
Although it sounds unbelievable, it's true. Projects with roadmaps are 8.5% less likely to sell out. Seven days after minting, their prices rise 9.8% above mint price... but 28 days later, they fall 5% below mint price. Why? Too many projects over-promise and ultimately fail.
Tip 2: Avoid derivatives (except Apes)
Derivatives of CryptoPunks are 3.7% less likely to sell out, and 28 days later, they trade at 65.8% below mint price. One exception is Bored Ape derivatives—these have a 5.3% higher chance of selling out, and 28 days after launch, they appreciate by 1,256% compared to mint price.
Tip 3: Avoid 3D art
While 3D NFTs have a 2.2% higher likelihood of selling out than regular NFTs, one month later, their prices drop by 23% overall! 3D art grabs attention quickly but seems unable to sustain value.
Tip 4: Target animated and music-based projects
Although animated projects have a 5.3% lower chance of selling out compared to standard NFTs, 28 days later, they trade at 38% above mint price. For music-based projects, collectors show a 7.7% higher likelihood of purchasing, and 28 days post-launch, prices are 71.5% above initial sale price.
Tip 5: Pay attention to artists active on Twitter
The study shows that artist-led collections have a 6.1% higher sell-out probability, and 28 days later, these NFTs appreciate by 72.2% compared to their launch price.
The research also reveals two additional findings:
1.Experienced traders achieve 43.5% higher returns when trading within the same NFT collection.
2.Experienced traders earn 39.5% higher returns when flipping identical NFTs.
How is this possible??? See Tip 6.
Tip 6: Shorter holding periods
Experienced traders hold NFTs for much shorter durations—they follow the principle of buying low and selling high. According to the authors:
"Experienced investors tend to sell NFTs that perform well, while inexperienced investors tend to hold onto them."
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