Can You Cash Out an NFT – How to Swap an NFT for Cash

With an NFT in a digital wallet that has made some profit, it stands to reason that someone would want to cash out the NFT, and reinvest or keep the profits made.

If buying an NFT isn’t complicated enough, cashing out an NFTs can appear as much of a challenging task.

Fortunately cashing out is a relatively simple process. I have cashed out on many NFTs over the past year, I can explain exactly how to do it.

To cash out an NFT it first needs to be put up for sale on the relevant marketplace. This is where the NFT is held. This can be more than one. Once the NFT is bought the funds, minus marketplace fees and royalties, are automatically transferred to the seller’s wallet as cryptocurrency, such as Ethereum.

Once the crypto is safely in your digital wallet it can be moved to a recognized and trusted cryptocurrency exchange platform such as Coinbase or Binance, converted to Fiat (the currency of your choosing) and transferred back into your bank account.

Here is an infographic visually explaining the step by step process:

Cash Out an NFT - Infographic

The process is straightforward once you know how, and fortunately the process is almost always the same each time you cash out an NFT.

When someone should cash out an NFT

NFT prices, like stocks & shares and cryptocurrency, can fluctuate daily, hourly and even by the minute!

Fluctuating NFT Prices

Watching the price of your NFT start free-falling suddenly can strike even fear in to the most hardened of NFT HODL’er. It gives them a lot of FUD!

HODL stands for ‘Hold On For Dear Life’, which explains a person who refuses to sell an NFT regardless of whether the price rises, falls or stays where it is.

FUD stands for ‘Fear Uncertainty and Doubt’ and explains the emotions many people go through when a widespread panic happens within the market causing a collective negative effect to overall decrease its value.

NFT holders can question whether to cash out of an NFT if the price remains stagnant and doesn’t change, whether the price sharply increases so they can profit from the original purchase price or when prices fall to recover as much as they can of the money spent in case the value crashes for good.

Knowing when to cash out an NFT is often considered an artform, and it doesn’t take long to see the same NFT holders continuously cashing out at the right time.

Its not by some secret magic, and those NFT holders do not have a special NFT crystal ball to consult – and although they can be considered fortunate, they couldn’t possibly maintain this fortune for every NFT buy and cash out.

Instead, they create a plan to trade in NFTs and stick to it at all costs.

This maybe a 20% profit or gain, ensuring that losses can be offset by profit. With the right due diligence it will hopefully mean more of the 20% profits and less of the 20% losses.

It’s easy to watch an NFT price rise 30% and think it’s shooting to the moon before waking the next next day see it fall back down to where it was, or even lower, wishing you had cashed out at the 30% gain.

It would be impossible to follow the market to cash out at exactly the 30% peak, but a gameplan of 20% profit cash out would have seen a return on investment.

The NFT could of course rise to 50% but the focus should be on the 20% gained, not the 30% lost.

This tactic is called emotionless investment, and it much easier to say then do.

Why would someone cash out or sell an NFT?

An NFT holder will either cash out an NFT to take the profits they have made, or to recover as much of the cash they spent on the purchase before the NFT price for the project crashes.

Perhaps the NFT holder has seen a different NFT in which they resonate better with, or believe more in another NFT project, road-map, and white paper.

In order to fund the purchase of the new NFT the holder may have to cash out, or sell, their current NFT.

On the other hand, the NFT may have significant value such as Crypto Punk, VeeFriends or MoonBird and the holder would like to diversify their portfolio if they feel the NFT industry may be heading towards a bear market, and decide to cash out their NFT to invest in real estate, for example.

Where to cash out an NFT

NFTs are cashed out or sold through the market-place they are listed.

For Ethereum network NFTs this is almost always OpenSea.

For Solana network NFTs this could be Solanart, Magic Eden or various others.

If you’re not sure where your NFT is listed you can either contact your NFT community, or the founders, on either Discord or Twitter – but an easier way is to simply check either the About Us section of the projects Twitter account, or the Official Links section on their Discord channel. This is usually where an official link to the collection and marketplace is shown.

If you do ask the community, make sure the link provided is from a legitimate source. Unfortunately, scams are very high in the NFT space, and fake links are provided to fake collections daily.

If you buy an NFT from a fake link you will lose your cryptocurrency on either a worthless fake NFT, or worse the smart contract you mint from could take all the cryptocurrency in your wallet and all your NFTs!

It is always recommended to look for the official links from the official Twitter account, or official Discord channels – as fake Twitter and fake Discord accounts can pop up too!

Blue verification ticks, as shown in the image below, on Twitter and OpenSea can show you which are the genuine collections!

Blue Tick Verification

Cashing Out an NFT – In Conclusion

It is possible to cash out an NFT by selling it on a marketplace, collecting the crypto funds in your wallet, exchange them for Fiat (USD, GBP etc..) on a crypto exchange and then send the money in to your bank account.

Choosing whether to cash out your NFT should be based on your NFT buying strategy, and market fluctuations.

Most NFT holders cash out when FUD sets in, although many NFT buyers who make the biggest returns usually keep to a trading strategy throughout bull and bear markets.

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