By this point, you’ve no doubt heard of the wonderful world of NFTs, whether you’re actively listening or not. Be it via the mainstream media fascination with this strange new hobby, or via SNL’s slightly cringeworthy but mildly amusing NFT rap explainer, you’ve likely grown to despise this acronym along with whatever other crypto shitcoin de jour is popping on any given day. Regardless, I’m not here to try and explain NFTs, or even understand them myself. But I am interested in taking advantage of some sweet, sweet NFT arbitrage opportunities.

What are NFTs (non-fungible tokens)?

Budgets are Sexy recently featured an excellent and comprehensive overview about what exactly these non-fungible tokens are, which is good because I don’t feel like explaining them myself. In layman’s terms, NFTs are digital art and collectibles. I mean, is that really so hard to understand?

Well, yeah. Kind of.

I don’t particularly understand why regular old art is worth what it’s worth, so I won’t even begin to attempt to breakdown the economics of the digital art market. Anything has value if enough people value it. And right now, people value NFTs. Which sounds to me like an opportunity to make a quick buck.

Where to flip NFTs

The amount of crypto money floating around, to the extent that money even exists as a social construct in the year 2021, is completely bonkers. The good news is that people still like spending money, regardless of whether it’s boring old fiat currency or via some sexy new decentralized blockchain technology. Not to brag, but I recently became a crypto hundredaire myself. And I already can’t wait to spend it. So, crypto millionaires and hundredaires alike are throwing cash at this emerging digital art market, usually in the form of auctions via sites like Nifty Gateway, Open Sea or Makers Place. Surely, there are others, but remember I’m a complete NFT noob here.

There are also niche sites like TopShot and ZED Run, which are more specific and come with their own unique communities and interactive engagement. Again, the Budgets Are Sexy post can provide some more in-depth info on all of this, but those are the few sites that I’m familiar with and attempting to dabble in.

How to value NFTs

So where do NFT arbitrage opportunities come into play? And how can anyone possibly value these digital collectibles in the first place? Well, I sure can’t. There are marketplaces that give you a good idea of relative value, but as you can imagine those fluctuate quite a bit for a variety of different reasons. Ultimately, like regular art and collectibles, all of this stuff is entirely subjective and basically made up. If a depression hit tomorrow, you’re going to be hard pressed to put food on the table with your digital gif of a naked former president (which recently sold for over $6 million).

But the bull market charges on, and the crypto bull is hopped up on amphetamines. So long as that remains true, NFT flipping opportunities will exist. I’ve kept a watchful eye on new NFT drops over the last few weeks, participating in various raffles and other low-cost offerings. I have yet to hit the jackpot in these pursuits, such as on Beeple’s recent $1 raffles (expected value of the raffle pieces begins around $50k), but I’ve been able to purchase some low end NFTs and immediately flip them to collectors who value them more than I possibly know how to. A common low-cost flip involves purchasing a $9 Topshot pack of three individual NFTs that have an immediate minimum expected value of $15-20. Not huge sums of money, but an opportunity to buy something that is instantly worth double what you paid–at worst.

The journey to crypto curiosity

Over the last few months, I’ve gone from not wanting anything to do with Bitcoin and other speculative bets to diving right into shark infested waters and, now, seeking out NFT arbitrage opportunities. I wouldn’t have known what the title of this post meant as recently as three months ago. So how in the world did this happen?

Hey, bubbles are all about riding the wave, baby. So long as you accept that the bubble is going to pop, there’s room to open yourself up to all kinds of new adventures. For my sake, I view flipping NFTs as a side hustle, not an investment.

Ultimately, I’m learning a lot about stuff that I know literally nothing about. That’s exciting! But most importantly, I’m learning with very small amounts of money. Just enough to feel alive and keep the FOMO at bay. Would I recommend crypto or NFTs as part of a personal finance playbook for the average investor? No way. It would only serve to confuse and potentially alienate someone trying to take control of their finances. But if you have a curious mind and a little money to play with, there’s some interesting stuff going on in the NFT space. Even if I don’t exactly know what the hell any of it is.