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NFT Floor Price: Meaning, Calculation, Changing, Flipping

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What Is NFT Floor Price Meaning
What Is NFT Floor Price Meaning
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One of the questions a lot of NFT beginners ask is “What is NFT floor price meaning?” This is because knowing the NFT floor price meaning is a good step to understand the NFT market and make a profit out of it.

If you are the type that sees NFT related tweets on your Twitter timeline, you would notice the term ‘floor price’ in every tweet about NFT that you came across.

This is because the NFT floor price is essential in the buying and selling of NFT projects.

NFTs mean different things to different people, those launching their NFT projects may be looking for exciting ways to advance their marketing efforts, make money, raise money for charities, or simply build an NFT community around some funny stuff.

If your aim is to become big in NFTs and make profitable NFT investments, you should know how the market operates. One key thing to understand in NFTs is the meaning of NFT floor price.

So in this article, we will answer your mind-boggling questions about what is NFT floor price meaning, how it works, where to locate it, how to use it to make profitable NFT investments, and how is floor price calculated NFT.

What Is NFT Floor Price?

Just like NFT volume traded, NFT floor price is also expressed in Ethereum (ETH). ETH is the basic unit that reports the value of an NFT project.

The bigger question is What does floor price mean NFT?

The NFT floor price is the lowest price an individual is willing to sell an NFT for in a given NFT collection which has other NFTs with higher prices. This means it is the lowest price at which a single NFT can be bought in a particular project.

NFT floor price meaning can also be the lowest amount of ETH you are able to spend to become a member of an NFT project or to own an NFT in a particular NFT project.

Usually, we say it’s the lowest price that you can buy an NFT but really it’s all dependent on the seller.

The NFT floor price is usually set up by the individual who owns an NFT in a specific project and is listing out for sale at a price lower than the NFTs of other sellers within that given NFT project.

A floor price is a term borrowed from commodities trading, the term refers to the price imposed by a group of sellers, organizations, or governments to control the minimum amount a seller could sell a good, commodity, or service.

This metric only entered the NFT community over the summer of 2021 as one of the most desired new features within the crypto community. As the metric is newly introduced, people begin to ask for NFT floor price meaning.

In crypto, NFT floor price is often one of the few difficult pieces of data that follow an NFT project, that is why most people want answers to NFT floor price meaning.

Example of NFT Floor Price

NFT floor price is easily accessible in most NFT marketplace.

On OpenSea you can see the floor price by clicking on an NFT collection and it’s updated by the hour.

Using ‘Invisible Friends’ NFT as an example which is one of the well-known NFT projects on the internet. The image below shows you the floor price on OpenSea.

Floor price
Floor price

Invisible Friends currently has a floor price of 5.2 Ethereum.

This means buyers or investors looking to buy an Invisible Friends NFT can be able to buy it for 5.2 ETH which is the lowest price a buyer has to get an NFT on the Invisible Friends project.

When you click on the floor price of the Invisible Friends project, it will show you the prices of other NFTs in the project sold by different sellers, sorting them from lowest to the highest prices.

Invisible Friends Floor price
Invisible Friends Floor price

The first NFT is at 5.2 ETH which is the stated floor price of the Invisible friends’ project. Then the rest are priced at 5.35 ETH, 5.49ETH, 5.65ETH, and so on.

This means that the floor price may not really represent what the NFT project is valued at, it’s just a single NFT or a few NFTs in the project that has their prices set cheaper than others by their sellers.

In some NFT collections, the floor price may be 5.5 ETH but when you click on the floor price to see the other prices, you discover that it’s only one NFT in that project that has the price in the 5.5 ETH range, the rest of the NFTs has high prices like 7.9 ETH, 8 ETH, and 8.5 ETH.

Another method one may use to own an NFT at a cheaper rate (even below the floor price) is through bidding. Biding is a way of sending a price offer to a seller which is usually below the stated price tag.

However, your chances of being accepted are probably because the seller is incredibly unlikely to accept your price offer unless they are in dire need of cash or in a rush to sell off their NFT.

Since OpenSea works almost the same way as eBay bidding, NFTs can be sold through an auction process.

This means that NFT buyers have the option to send bidding offers to sellers at a low price which is another way to own an NFT below the floor price.

The only downside is that this method is time-sensitive which means it takes a lot of time for a seller to respond to your bidding offer and in most cases, the seller is likely to reject your offer.

How Is Floor Price Calculated NFT

After knowing the answers to what is NFT floor price meaning, another question that will come to your mind is ‘how is floor price calculated NFT?’

It is extremely important to understand how the NFT floor price is calculated, it can help you reduce the chances of losing money or making a bad NFT investment.

Since the NFT floor price is the value of an NFT with the lowest price tag in an NFT project, to calculate the NFT floor, you need to look for that NFT.

To find the NFT, you have to open the NFT project. When you open the project, you will find out that it is sorted from low price to high price, if not, click on the drop-down on the right-hand side and select the option that says “Price: low to High”.

Sort price
Sort Price

After sorting the price, you will notice that there are NFTs that are below the initially stated floor price of the NFT project, those NFTs includes bids, auction, and offers.

So to get the actual Floor price, you have to sort them by clicking on the “Buy Now” button on the left-hand side.

Click on By Now
Click on By Now

Once you click the button, the price of the first NFT on that list is the floor price of that NFT project and this is how the NFT floor price is calculated.

NFT floor price shown
This is the NFT floor price

What determines the value of NFT floor price is the demand and this is applicable to other products. If an NFT is in high demand, no seller would want to sell it at a lower price below the value of other NFTs in that project.

But on the contrary, when the demand for an NFT is lower, most sellers will be in a rush to sell off the NFT and because of that, they will bring down the price in order to sell out the NFT as quickly as possible before it freezes out.

In NFTs, there are a lot of factors that influence the floor price of an NFT project and these factors include but are not limited to:

  • Product’s uniqueness
  • The utility of that NFT
  • Creator’s popularity
  • Surprising to the NFT market
  • Appealing to a wide range of buyers
  • Extra perks

In nutshell, the rarer an NFT project is, the more valuable that given NFT project may be.

Although not the major, the floor price is one of the tools NFT investors use to check the rarity of an NFT and determine the chances of the value of an NFT project appreciating.

How to change floor price OpenSea

After knowing NFT floor price meaning, the next thing that comes to your mind is, how to change floor price OpenSea.

Because NFT floor price is a common way of estimating and tracking the value of an NFT, many creators are looking for a way to change NFT floor prices.

Well, there are different ways on how to change floor price OpenSea, but in this article, we are going to discuss the ones that are most effective in changing the floor price of an NFT on OpenSea.

If you are looking how to increase NFT floor price, follow the following steps to increase your NFT floor prices:

  1. Sell your own NFTs to your other wallets at a higher price, which will automatically increase the floor price of your NFTs.
  2. If there aren’t many NFTs on the market, you can list your NFTs at higher prices without planning which will increase the floor price.

But if you are looking for how to decrease NFT floor price, below are ways to achieve that:

  1. If you are a large NFT holder and want to own more NFTs at lower prices, you can first sell some of your common NFTs at a lower price. This could scare other holders to sell their NFTs before the price goes even lower.
  2. You can even list your NFT at a low price and immediately buy it with your other wallet.

When talking about how to change floor price OpenSea, bear in mind there may be consequences either on your NFT value or from Opensea if they find out that you are manipulating the floor price.

NFT floor price flipping

After understanding NFT floor price meaning, then this topic about NFT floor price flipping should not pass you by because it will help you know how to use floor price for better NFT investment.

NFT floor price flipping is not exactly what the media portray it to be and it is extremely important to understand how to use NFT floor prices to make good investments because it helps reduce the chance of an investor losing money.

If you truly have the knowledge of how NFT floor price works in terms of investment, it can help increase the chance of you catching a great opportunity and increasing your profits.

Buying an NFT at the floor price is usually because it helps the buyer to receive the benefits and utility of flipping the NFT for higher profit.

However, low NFT floor prices are the willingness of NFT sellers to sell their NFTs for lower prices just because they lost faith in that particular NFT project.

And this can bring doubt to its potential new buyers thinking about whether to buy an NFT from that collection since its current owners want to leave the project by all means, even willing to give up their NFTs cheaply.

While the increase in floor price means that the project owners believe so much that the NFT project will later appreciate so they are not willing to give up their NFT cheaply.

This strong belief in an NFT project and unwillingness to give it up at a cheaper price by most of its sellers is what makes these NFTs rare and scarce, which mostly means rising prices.

However, there are smart ways to buy NFTs with low floor prices and a high potential of appreciating in the nearest future and this is called NFT floor price flipping

For example, when you go to OpenSea and on the floor price of an NFT project, it will sort them from lowest to the highest and the first is to check to see if everything is within the same range like 3.2 ETH, 3.25ETH, 3.35ETH,  and then 8 ETH, 8.5 ETH, 9.2 ETH and so on.

As a buyer, you have to stay away from this kind of thin floor NFTs because this kind of NFT floor price flipping will not yield any profit, rather you will end up losing your money.

Since many sellers in this project are reducing the floor price, it may be because the NFT is not valuable and rare, and most of the sellers don’t believe it will appreciate in the nearest future, so they are rushing to sell off the NFTs at a cheaper price.

Another example is when you see the floor price of an NFT project as 3 ETH but when you click to see further, you discover that it’s only one NFT that has 3ETH, the rest has 6 ETH, 6.5 ETH,  7.1 ETH, and so on.

This means there is only one outlier, so as a buyer it is a great opportunity to buy that NFT up fast because it means that it’s only one seller that doesn’t believe in the NFT project which may be due to insecurity or personal problem making them rush to sell off the NFT.

Then there’s the other side as a seller. You might see you have an NFT that you think is worth 6 or 6.3 ETH right and that’s what you can sell it for, but then one day you noticed, on Opensea that the floor price is 3 ETH and you are ready to sell.

Before you sell, head over to OpenSea and click on the floor price and see the surrounding NFTs it may be that there was just one person, one outlier that set the price really low.

That price doesn’t really represent the value of the project so it’s probably a good idea to hold on for the NFT instead of panic selling it for a very low price. This is the first thing.

The second thing to pay attention to is that after checking the surrounding NFTs alongside the floor price, you also have to check what is going on at the traded volume to see how often the NFTs are being traded.

If you head over to a project on Opensea and click on volume traded, it will bring you to a page that looks like the image below and it will show you how often people are buying that given NFTs and what you should be looking to buy in this NFT space is ideally something that is being traded often.

Invisible friends 'Traded Volume'
Invisible friends ‘Traded Volume’

Because NFT space is a very illiquid market meaning there’s not always a buyer and there’s not always a seller. You may see a floor price for an NFT is one ETH but no one is actually buying it.

So if we are looking at this project for ‘invisible friends’ NFT in the image above, you can see they are being traded pretty often like 17 minutes ago, 23 minutes ago, 24 minutes ago, and so on.

In the NFT market, this kind of liquidity can dry up really fast. Just because Invisible Friends NFT is being traded now and every couple minutes doesn’t mean in two days or a week from now it will be the same, but this is the kind of NFT you should be looking to buy.

If you see that someone sets a floor price at let’s say 0.1 ETH yet it’s being traded every hour or every two hours. This means that even though the price is too low, the demand is still lower and this kind of NFT is the one to avoid.

But we do notice that as projects become more valuable, and as they increase in price, they are actually traded less often.

We take for instance Bored Ape Yacht club NFts, they were sold let’s say two hours ago, seven hours ago, and 12 hours ago and this is for two reasons.

The first reason is that these are expensive at 40 to 41 ETH floor price many people are priced out but also this is a liquid because of the sellers.

How To Avoid NFT Floor Price Manipulation

We all know that NFT  floor price is one of the ways of estimating and tracking the value of NFTs, it could be manipulated to trick you into believing that it is worth it.

When you see an NFT with the floor price at 1 ETH, to find out if that is what the actual worth is, you have to click on the floor price and then see the prices of other NFTS inside that project.

You have to check if they are all at the same range, and not only that, you also need to check the volume traded to see how often the given NFT projects are being traded

If every other NFTs in that project are being priced at the range of 1 ETH and that’s what the bottom 20 are all being listed, but then you discover that no one is actually buying it after checking the traded volume.

This actually means that the given NFT project is not worth 1 ETH, it is worth much less.

This is very important to understand when buying an NFT, because you may buy something thinking that you purchased a valuable NFT at a cheaper rate and planning to sell it in the future at a higher price.

But if you don’t check these metrics, you might just end up holding something that you can’t even sell because the demand is pretty low, and even if you manage to sell it, you will end up selling it at a very low price.

Another NFT floor price manipulation is when most NFT holders intentionally want to pump the market.

For instance, when there are not enough NFTs on the market, most NFT owners might list their NFTs for exorbitant prices without any plan to sell them.

Because there are fewer sellers, that high price would show up as the floor price which is something nobody would normally buy at that level.

While others may choose to sell their own NFTs to their other wallets, which will make the price go up.

CONCLUSION

In this article, we’ve answered the question “what is NFT floor price meaning?” with an example of how to use NFT floor price and then revealed how the floor price of an NFT project could be manipulated.

We hope it will help you understand what is NFT floor price is and everything you want to know about the NFT floor price.

Bear in mind that NFT price floors are not the only metrics used to determine the value of an NFT project. There is an asset’s programmable rarity, subjective readings of a project’s community, provenance, and history.

Aside from the above metrics, there are also more technical metrics that can be used to determine the percentage of a project’s supply that has been listed over time, which is a signal of how many motivated sellers there may be.

Thank you for having time to read about NFT floor price meaning to the end. Please don’t forget to share this article about NFT floor price meaning with your social media friends.

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