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In the world of cryptocurrencies and blockchain, NFTs are the latest that is making headlines and drawing the attention of investors and speculators alike. Whether you are a content creator, a cryptocurrency trader, or simply interested in the new and exciting world of NFTs, it is important for you to be aware of what NFTs are, how they work, and the different strategies as well as platforms that you can use in order to trade them.

In this guide, we go over trading platforms and best practices that you can use to trade NFTs in the UK. Read on to learn more.

Best NFT Trading Platforms List 2022

While there are different NFT trading platforms available in the market, some of the best NFT trading platforms that you should consider have been reviewed below.

1. Binance NFT Marketplace – The Overall Best NFT Trading Platform

Binancenft trading cards is one of the most popular cryptocurrency platforms in the world, and it boasts of the highest selection of NFTs and altcoins. If there is any NFT or altcoin you wish to invest in, there is a very high chance that it can be bought through the Binance NFT Marketplace. The platform also deals with billions of dollars in trading volume every day. Usually, you will be able to deposit funds into Binance via credit/debit card or a bank transfer, making for a convenient experience.

nft trading platform

The platform charges high fees for deposits and withdrawals – between 2% and 3%. However, they have very low trading fees and are known for being one of the cheapest crypto trading platforms in terms of their fees. Usually, the fee is 0.1%, and it is even lower if you have an allocation of the Binance Coin (BNB). They also have a wide variety of tools and technologies available specifically for cryptocurrencies, which makes them a suitable option for highly experienced NFT traders.

Binance fees

Fee Amount
Crypto trading fee Commission, starting from 0.1%
Inactivity fee Free
Withdrawal fee 0.80 EUR (SEPA bank transfer)

Pros

  • Advanced charting platform with numerous technical indicators
  • Hundreds of NFTs are available
  • Very low commissions
  • Supports fiat currency deposits
  • Low fees, with additional discounts for using BNB
  • Security measures are very tight and proven to be among the best in the industry

Cons

  • Charges up to 2% on credit/debit card deposits
  • Customer service responses can be delayed at times

Your capital is at risk.

2. OpenSea – The Best Platform for the Largest NFT Variety

nft trading OpenSea is also a very popular NFT trading platform that allows users to trade on a variety of NFTs. it is quite popular because it offers the largest collection of NFTs and among the lowest gas fees in the industry. It supports payments in a variety of cryptocurrencies, including BTC major altcoins such as ETH and ADA. however, it does not support payments in fiat currencies such as USD or AUD. In addition to this, the platform allows you to list your NFTs on a variety of blockchains, such as Etheruem, Polygon, as well as Klaytn.

best nft trading platform

Another advantage that the platform has over others is that in addition to charing only a 2% buyer’s and 2.5% seller’s fee, it also allows you to mint NFTs through the platform, thereby allowing you to sell your artwork and other digital as well as physical assets through its marketplace.

OpenSea fees:

Fee Amount
Crypto trading fee Commission, 2 for buying and 2.5% for selling
Inactivity fee Free
Withdrawal fee Free

Pros

  • Largest variety of NFTs available
  • Very low commissions
  • Ability to publish NFTs too
  • Wide variety of blockchains for listing NFTs

Cons

  • Does not allow payments via fiat currencies
  • Customer service responses can be delayed at times

What is an NFT?

Non-fungible tokens are unique digital assets that contain identifying information that is recorded in smart contracts. To understand them better, let us split the sentence and understand each of these words.

NFTs are non-fungible, in that they are unique and not replaceable. What makes an NFT unique is the information that identifies it, which is contained in smart contracts. No 2 NFTs are alike, and therefore they cannot be swapped for each other. This is in contrast to, for example, a $1 bill. If you had a $1 bill and someone else had another $1 bill, you would have no problem swapping them for each other since they are basically the same and indistinguishable. This is not the case with NFTs, since their smart contracts state that each NFT is unique, and therefore, cannot be exchanged with other NFTs.

An additional characteristic of fungible tokens is that they can be sold or transferred in parts. For example, you could send someone $100, and they could send you $100 back. At the same time, you could also send them only a small part of $100, and that small part would have some inherent value in itself. The same applies to Bitcoins, and you can transfer smaller units of Bitcoin, which are measured in satoshis. One satoshi is the equivalent of 0.01BTC. Of course, the value of what a BTC is worth in terms of US$ might change over time, but what remains constant throughout is the fact that fractional bitcoins can be transferred. This is not the case with NFTs usually. In this regard, they are not very different from a concert ticket. Similar to how a part of a concert ticket wouldn’t mean anything, a fraction of an NFT doesn’t mean anything either. However, investors have been experimenting with the idea of fractionalized NFTs in recent times, though most experts say fractionalized NFTs are a legal grey area and could be classified as a security, under which case they would be subject to supervision and regulation by the appropriate agencies.

One of the first NFTs ever produced was the CryptoKitties collectibles. These were launched as a part of the game. If you were to send someone one CryptoKitty and receive another one back from them, they would not be alike in any way. Therefore, the purpose of the game was to collect different kinds of CryptoKitty tokens. The information that identifies an NFT and makes it unique is recorded inside a smart contract and is recorded on the blockchain of the token. This way, irrespective of who owns the NFT, its unique identifying information is still there, and it can be authenticated. In this regard, an NFT is like a work of art. This is also what prevents people from being able to copy an NFT because the smart contract that is stored and registered on the blockchain cannot be copied, and thus the fake NFT will always stand out as a copy.

Your capital is at risk.

NFTs have become popular in recent times because they have a variety of special attributes, one of them being that they are usually linked to specific assets. They can be used to prove ownership of these assets, and thus they serve as a form of ownership proof. The assets that they are linked to could include, for example, digital game skins. However, they are also occasionally used to prove the ownership of physical assets.

As well as representing digital collectibles like CryptoKitties, NBA Top Shot, and Sorare, non-fungible tokens can be used for digital assets that need to be differentiated from each other in order to prove their value or scarcity. In the past, they have primarily been used to prove the ownership of digital assets, however, these days they are used for a variety of other purposes in the physical world too. They can represent everything from virtual land parcels to artworks, to ownership licenses.

They’re bought and sold on NFT marketplaces. While dedicated marketplaces such as OpenSea and Axie have hitherto dominated the field, recently some of the leading cryptocurrency exchanges have begun to muscle in on the space, including Binance.

The process of how an NFT works is that the information of whoever owns an NFT is stored on the blockchain. For this purpose, the creators can either use an Ethereum blockchain, which is most commonly used, other blockchains such as Solana, Flow, TRON, or NEO, or create their own blockchain space. The smart contracts can be filled with detailed attributes, which include information such as the identity of the owner. However, they might also occasionally include rich metadata or secure file links. In a world that is becoming increasingly digital and is suffering from outdated copyright laws, the promise of immutable identity and ownership proof by the use of NFTs is fast gaining popularity.

However, just as is the case with most other products involving the use of blockchain, the technology is still under development and is being updated almost every day. Creating decentralized applications and platforms for the management and creation of non-fungible tokens is still relatively complicated. There is also the challenge of creating a standard. Blockchain development is fragmented, many developers are working on their own projects. To be successful there may need to be unified protocols and interoperability.

How Can I Trade NFT?

If you are interested in the concept of NFTs, a collector, or you’re simply looking to profit off of speculating on NFTs, the first thing you need to do is to understand how to trade NFTs. The process is relatively simple, though it can appear complicated to outsiders. Therefore, we have listed down every step of the process to make it easier for you.

Step 1: Select a broker

The very first step that you need to take is to select a platform that allows you to trade NFTs. While there are several such platforms, it is important for the platform you choose to be suitable for your trading requirements. The different criteria that you should look at include the fee structure of the platform, the non-trading fees such as the withdrawal and deposit fees, the range of products that they allow you to purchase, as well as the general usability of the platform. There are 2 types of NFT platforms that you can choose from: NFT marketplaces and cryptocurrency exchanges. Each of them has its own set of advantages and disadvantages. While NFT marketplaces offer a wider variety of products to choose from, crypto exchanges have their own crypto wallets, making it easier for you to trade on NFTs without having to link your crypto wallets from other platforms and paying transfer fees.

Some platforms, while providing low fees and a wide product variety, are designed in a way that makes them difficult to navigate. Therefore, you will end up spending several months just getting used to the platform and its navigation. In addition to this, it is preferable for the platform that you use to have a mobile app as well, so you can monitor and manage your positions on the move. This will also allow you to participate in NFT auctions and bid on items even when you are not close to your computer.

Your capital is at risk.

Step 2: Create an account and connect it with your wallet

The next step, once you have identified what platform you will be using to trade, is to create an account with this platform. This is usually a straightforward and simple process. It usually involves creating an account by filling up a form and getting this account KYC verified. After this, the next things you will do depend on the type of platform that you have chosen.

If you have chosen a crypto exchange, your next step will be to purchase cryptocurrencies on this platform. You can purchase any major cryptocurrency including BTC and ETH. this will then automatically be stored in your crypto wallet. You can store multiple cryptocurrencies in your crypto wallet, and this will then be used to buy and sell NFTs through the platform.

On the other hand, if you have chosen an NFT marketplace, then you also need to open an account with a crypto wallet provider and deposit cryptocurrencies into it. Once you have done this, you will have to link this crypto wallet to your NFT marketplace account. Then, you will be able to buy and sell NFTs easily through the use of this crypto wallet. Before depositing your crypto into a wallet, you need to make sure that it is compatible with whatever marketplace you are using.

Linking your account to a crypto wallet, whether on the platform or externally, is important for two reasons. One, the money you need to buy NFTs and the proceeds from their subsequent sale will be debited and credited to your crypto wallet in crypto. At the same time, for the time that you choose to hold the NFT, it will be stored and held in your crypto wallet itself.

Step 3: Identify an NFT trading strategy

The next step for you is to identify an NFT trading strategy. There are several trading strategies that have been discussed below that you can choose from.

Step 4: Choose an NFT that you wish to buy

Once you have completed all these steps, the only thing left for you to do is to head over to the NFT marketplace and identify the NFT you wish to buy. There are two forms of NFTs: those that are available for outright purchase and those that have auctions. If your NFT is available for outright purchase, all you need to do is click on buy, follow the instructions on the screen, and confirm the transaction. The amount of purchase will be taken from your crypto wallet, and the NFT you purchased will be added to it. It is best for you to not trade NFTs during periods of high volatility because the fees are much higher. Sometimes, the fee can be high enough so that you end up paying more in fees than you did for the NFT itself.

Risks of Trading NFTs

There are a variety of risks associated with trading NFTs, and some of the biggest ones have been discussed below.

  • NFTs are largely speculative and derive their value from what buyers deem them to be worth. This means that you could easily find an NFT you are holding to be worthless.
  • The market for NFTs is not very liquid, and it might not always be very easy to find a buyer.
  • Different NFT marketplaces and trading platforms have very limited supported wallets, so if you are planning to trade NFTs on multiple platforms, you might have to split your crypto holdings among multiple wallets and platforms, which is quite cumbersome and confusing.
  • The fees that platforms charge for the trading of NFTs, called gas fees, can be quite high, especially for NFTs that are in demand or highly valuable. There have been numerous instances of gas fees being 10xthe value of the NFT itself, or even more. This makes trading them an attractive proposition since it would be like paying $1000 in commissions to buy $100 worth of shares.
  • The technology is still developing, so there is always a risk of tomorrow’s technology making any and all NFTs developed today obsolete, which would make the value of the NFTs you own to be 0 and worthless.

NFT Trading Strategy

In order to trade NFTs profitably, it is important for you to have a strategy that you can use. While there are several different strategies available that have been proven to be profitable, the 2 most common ones have been discussed below.

Buy the Floor

NFTs are still in their early stages and shall continue to be here for quite a while. Therefore, a smart strategy would be to buy NFTs at their floor price, which is the lowest price of a non-fungible token within a given category. Although this should not be your only reason for buying an NFT, you could select a branch you are passionate about and buy NFTs related to it at floor prices. For instance, you may choose rare NFTs over others and select the token with a floor price within that category. Buying the floor is a good trading strategy that positions you for enormous growth should the token become more popular in the future.

Search for Google Trends

Even if you are a beginner to the world of NFT trading, you can easily determine if an NFT is popular by looking at the Google Trend results. The Google trend is used to measure public opinion toward a particular topic or keyword and searches for the word are scaled in a range of 0 to 100. When the rating is high, it indicates that many people are getting involved with NFT collectibles and it indirectly signifies a good buy time. However, when the search for NFT-related keywords is low, it means you will need to tread carefully as fewer people are showing interest in the market.

Your capital is at risk.

Are NFTs Regulated?

No, NFT trading is not regulated. While there is a possibility that they might be regulated in the future, so far the vastness and the general inaccessibility to blockchain technology for regulatory agencies have made it impossible for them to regulate the trading of NFTs. However, some particular NFT marketplaces and exchanges are regulated by agencies in a few countries.

How to Get Started with an NFT Trading Platform – Binance NFT

The process of opening an account on the best NFT trading platform, Binance NFT, is relatively simple and straightforward and incorporates 4 steps. These have been discussed below in detail.

Step 1: Open an Account

nft trading platforms

The first step is to open a Binance account. This can be done by simply heading over to their website and clicking on the “Join Now” button. You can either create an account from scratch or log in using your Gmail account. Initially, you will only be asked to enter your email address and to create a strong password. If you are planning to deposit funds with cryptocurrencies only – there is no other information that you need to provide.

Your capital is at risk.

Step 2: Upload ID

nft trading cards

If you want to fund your Binance account with a debit/credit card or bank transfer – you will need to complete a KYC process.

First, you need to enter your personal information – such as your name, country of residence, date of birth, and home address. You also need to supply your mobile number. Next, you need to upload a copy of your government-issued ID. This can be a passport or driver’s license. In some countries, you might be able to use a national ID card.

Step 3: Deposit Funds

The deposit process on Binance will depend on the payment method you wish to use.

Crypto Deposit

If you are depositing funds with cryptocurrency – you will need to head over to the deposit page from within your account dashboard. Look for the digital asset that you wish to use and click on the ‘Deposit’ button. You will then be shown your unique wallet address for the respective digital currency.

Copy it to your clipboard, head over to your private wallet, paste in the address, and confirm the transaction. The funds should arrive in your Binance account in approximately 20 minutes.

Debit/Credit Card Deposit

If you want to deposit funds with your Visa or MasterCard – hover your mouse over the ‘Buy Crypto’ tab and click on ‘Credit/Debit Card’. Then, decide whether you want to fund your account with fiat money or directly purchase a cryptocurrency. Follow the on-screen instructions by entering your card details and confirming the transaction.

Bank Account Deposit

If eligible, you might also be able to deposit funds by performing a local bank transfer. Hover your mouse over the ‘Buy Crypto’ tab and click on ‘Bank Deposit’. Then, Binance will display the bank account details and reference number that you need to use.

Head over to your online or mobile banking app and complete the transfer. In some countries, such as the UK, the deposit will be processed in a matter of minutes.

Step 4: Trade Altcoins

nft trading platform

Once this process has been completed, you can then easily head over to their NFT marketplace, where you will be able to view, bid on, buy, and sell NFTs with ease.

Your capital is at risk.

eToro – Buy Cryptocurrencies to Acquire NFTs

nft trading

If you decide to buy NFTs through an NFT marketplace instead of using the NFT offering on a crypto exchange, then you will need to link your NFT marketplace account to a crypto wallet. One of the best crypto wallets that you can use for this purpose is eToro. The first, and perhaps most important reason why we would choose eToro is that the platform is heavily regulated. Having such a strong regulatory framework will ensure that your funds are kept safe at all times and that you are trading in fair and transparent conditions. When you consider that eToro also allows free deposits into your account, you will also realise that other platforms charge much huger deposit fees.

In addition to this, at eToro, not only can you access cryptocurrency-related markets, but thousands of stocks and ETFs that you can buy and own outright. Best of all, you won’t pay a single cent in commission. You can also access forex, commodities, and indices via CFD trading instruments. It also allows you to copy trade, wherein you can copy other more experienced cryptocurrency traders and profit off of their expertise.

eToro – Best Cryptocurrency Exchange To Buy NFT

best nft trading platform

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

FAQs

Which are the best NFTs to trade?

While your choice of NFTs to trade will depend on your own preferenced and area of expertise, the best ones to trade are those that are registered on the Ethereum blockchain.

What are the best NFTs trading platforms in the UK?

While different NFT trading platforms might be appropriate for you based on your own trading needs and requirements, the overall best platforms that you should consider using are Binance, Axie, and OpenSea.

Do I need a crypto wallet to trade NFTs?

Yes, you will need a crypto wallet to trade NFTs since your funds are withdrawn and deposited to this wallet.

Are NFTs legal in the UK?

DYes, trading NFTs is not illegal in the UK, but it is not regulated and all traders are advised that NFTs carry a lot of inherent risks.

How much money do I need to trade NFTs?

The amount of money that you need to buy NFTs will depend on the type of NFTs you are planning to buy, and the minimum deposit requirements of the platform you wish to buy them from.

About Nishit Kumar
About Nishit Kumar

I'm a second year Accounting and Finance student at the University of Warwick, in addition to being an incoming Trading Analyst at Morgan Stanley. I'm passionate about the financial markets and all things finance.

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