- Approximately 26.9 billion dollars worth of cryptocurrencies were transacted with Ethereum’s smart contracts hosted as NFT marketplace.
- Opensea happens to be the most popular marketplace for NFTs in 2021
- Central & Southern Asia became the top traded geographical space to have traded into NFTs
- Whitelisting of NFTs helps investors profit by a mile.
2021 has so far been a wild ride for NFTs. While these tokens of exclusivity have pleased fans of various celebrities by handing out such evolutions of autographs & authenticity, investors too have taken a shine at these rare tokens. A recent report from a blockchain analytics firm Chainalysis has described the NFT market in the same light.
According to the report, investors and enthusiasts purchased 26.9 billion dollars worth of NFTs in specific Ethereum smart contracts, ERC-721 & ERC-1155, used as NFT marketplaces & collections. The data was time-bound & recorded transactions that took place between Jan-Oct 2021.
While a significant 80% of transactions took place by retail investors, the collector-sized or mega purchases witnessed an increase of 13% while standing at 6% in Jan & rising to 18% till Oct 31st, 2021. The institutional trading comprises 1% host participants but accounts for 26% of the volume.
A transaction was considered retail if it was worth less than $10,000, where collector size was held at their upper limits of $100,000 & considered institutional where it was worth greater than the same. According to the study, retail dominated the markets while witnessing a significant increase in collector-sized transactions in the beginning days of September.
When it came to their transfer of their ownerships, it was noted that 63% of the total volume was traded by investors being under collector sized & 26% of transfers trading from the higher-ups of institutions while the dominant retail participants held only 11% of the total value, A surge was witnessed in the institutional segment in the latter half of 2021
Sea of Exchanges
Like cryptocurrencies, with 16 Billion worth of transactions, the NFTs are also dedicated and co-dependent on the Exchanges. According to the report, Opensea happens to be the most widely approached marketplace since it allows investors to transfer the NFTs directly into the wallets of other users, making it a decentralized sought exchange. In contrast, other exchanges take custody of the token. While speaking about the most traded NFT collection, Crypto punks established well before the craze in 2017 witnessed transactions worth more than $3 billion from march 2021.
Who brought more?
The research also looked at the web traffic for various exchanges according to NFTs, noting that Northern America led the race during the first half of 2021. In the latter part of the year, South & Central Asia witnessed & led markets. However, not all divisions have made more than 40% of web visits since march 2021.
Whitelisting makes clear profits
The success of the tokens inherently begins when the creators start promoting their Art or content way before they are launched on various platforms. By design, the success of NFTs is dependent on peer-to-peer promotions or word of mouth through exemplary quality or fame, thereby creating a fanbase even before the tokens hit the trading floors. By adding followers to the whitelist by creators, Investors or buyers can purchase the NFTs at much lower costs than markets.
According to the report, new NFTs witnessed a profit of 75.7% by being whitelisted compared to 20.8% without being on one. The report also stated that it was almost impossible to gain outsized returns without being whitelisted. On the contrary, 78% of non-whitelisted buyers witnessed a loss.
Regardless of which, the NFT market spectrums seem to have humongous prospects to various participants in the asset class and are also expected to flower & bloom in the future.
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