One of the defining characteristics of the 21st century has been the digitization of the world.
Virtual reality, augmented reality, social media and online marketplaces are a few mainstream examples of the physical world transitioning online. Even physical items, such as art, jewelry, real estate and collectibles, have now moved from the physical world to the virtual one via non-fungible tokens, or NFTs.
But you’ll need an NFT marketplace to buy and sell these digital assets. For our list of the best NFT marketplaces, we focus primarily on reputable platforms compatible with the ethereum network and have the highest market capitalizations and NFT trading volumes, according to CoinGecko.
Best NFT marketplaces
Compare the best NFT marketplaces
Supports ethereum assets: ethereum was used in the screening process because the vast majority of top NFT collections are on the ethereum network. NFT marketplaces that are not compatible with the ethereum blockchain tend to be more niche markets with less mass appeal to investors.
Top trade volume: Each of the five NFT marketplaces included has at least $3 million in volume over the past 30 days. Marketplaces with lower volumes have lower liquidity, increasing risk for investors.
Market share: NFT marketplaces included in this list all have at least 0.9% of the total NFT market share, according to CoinGecko. NFT investors have chosen these markets as the best options for NFT trading but market share will continue to shift as the industry evolves.
Why other marketplaces didn’t make the cut
We focus only on NFT marketplaces that have a significant number of users, a track record of reliability and a significant amount of liquidity. Niche marketplaces that support NFTs only compatible with blockchains other than ethereum also didn’t make the cut.
We excluded platforms that have a confusing user interface and are difficult for new NFT traders to use. We also avoid marketplaces that charge exorbitantly high fees.
NFTs can be a fun and exciting way to build a digital asset portfolio, make a quick buck with some speculative trading or attempt to profit off a long-term growth trend in digital collectibles and art.
However, the NFT market is still very new and thinly regulated, so investors should make sure to thoroughly research not just the NFTs they are buying but also the marketplace they are using to do so.
Tim Schmidt, founder of financial resource IRA Investing, says NFTs have their own unique set of risks and opportunities.
“Would I recommend investing in NFTs? Absolutely—provided it’s done with thorough research, vigilance toward market trends and the wisdom never to risk more than you can afford to lose,” Schmidt said.
What is an NFT marketplace?
An NFT marketplace is simply an online platform where investors, traders and collectors can buy and sell NFTs. There are dozens of different NFT marketplaces out there, many of which are specialized and focused on specific types of NFTs or NFT collections.
Mass NFT marketplaces have a wide variety of users and many different types of NFTs, while niche NFT marketplaces may focus exclusively on themes such as music, art or sports. Before you choose an NFT marketplace, consider factors such as liquidity, blockchain compatibility, payment methods, fees and NFT collection diversity.
How do NFT marketplaces work?
To use an NFT marketplace, you’ll typically need to start by purchasing a digital cryptocurrency wallet.
Once you have secured a wallet, you must fund it with cryptocurrency that you will use to purchase NFTs and pay any associated transaction fees.
Choose a marketplace that has lots of buyers and sellers and plenty of positive reviews from other users. Connect your wallet to the marketplace and simply select which NFTs you’d like to buy. Once you own NFTs, you can use the same marketplaces to list, sell or trade your assets.
How do you choose the best NFT marketplace?
The first consideration when choosing an NFT marketplace should be the site’s reputation among other users and its security measures.
Once you have confirmed that the digital assets you’re interested in are available on the marketplace, explore the platform’s transaction fees and other requirements. Next, check to ensure the marketplace is compatible with the crypto wallet and payment method you intend to use to buy NFTs.
Make sure you understand and feel comfortable using the marketplace’s interface, features, tools and charts. Finally, confirm that the trading volume and liquidity of the marketplace are high enough to ensure there are adequate buyers and sellers and accurate price discovery.
Frequently asked questions (FAQs)
Whether or not NFTs are a good investment depends on a range of different factors, including the types of NFTs you buy and your individual investment goals. Long-term investors should understand the NFT market has only been around for a few years, so it’s impossible to know whether or not buying and holding NFTs for several years is a good strategy.
Blur and OpenSea together make up more than 90% of the NFT market, so new traders should probably stick to one of those two major marketplaces.
OpenSea has been around for the longest is known for its diverse NFT offerings and user-friendly interface, so it’s probably the best place to start for a brand-new NFT trader learning the ropes.