1. Market Volatility: NFT prices can fluctuate wildly based on trends, hype, and speculative interest. Values can drop suddenly.
2. Lack of Liquidity: It might be hard to resell NFTs, especially niche or lesser-known ones. Unlike stocks, there isn’t always a buyer ready.
3. Scams and Fraud: The NFT space has seen rug pulls, fake collections, and impersonators. Verifying authenticity is critical.
4. Intellectual Property Issues: Ownership of an NFT doesn't always grant IP rights. Legal battles can arise if the original creator’s rights are infringed.
5. Platform Risk: If a marketplace shuts down or suffers a hack, your assets could be lost or inaccessible.
6. Regulatory Uncertainty: Governments are still defining how to handle NFTs. Future regulations could impact their legality, taxation, or usage.
7. Environmental Concerns: NFTs on proof-of-work blockchains (like Ethereum pre-Merge) have faced criticism for high energy consumption.
8. Overvaluation & Hype: Many NFTs are driven by speculative hype rather than intrinsic value, leading to bubbles.
9. Storage and Custody Risks: Losing access to your digital wallet (via lost keys or security breaches) means losing your NFT.
10. FOMO-Driven Decisions: The fast pace and social media influence in the NFT space can lead to impulsive, uninformed purchases.