Chainalysis report: Who is holding and investing in NFTs?


Written by: Chainalysis

Compilation: Moni

As one of the hottest verticals in the cryptocurrency industry, NFTs experienced explosive growth in 2021, and in 2022, the entire market began to stabilize. Data doesn’t lie, let’s take a look at exactly how the NFT market has changed since the beginning of 2021.

Significant growth in transaction volume but cyclical fluctuations

Since the beginning of 2021, NFT transaction volume has grown significantly, but this growth has been accompanied by cyclical fluctuations. NFT trading activity ebbs and flows – January 2022 continued the 2021 growth trend, but entered a downturn in February before recovering in mid-April.


As of May 1, more than $37 billion has been injected into the NFT market. If there are no abnormalities in the market in the remaining 7 months, the NFT market this year is likely to exceed the $40 billion inflow in 2021. Furthermore, since late summer 2021, the growth of NFT transactions has been intermittent, with two transaction spikes occurring during this period:

1. The first time is in late August 2021, and this transaction peak may be driven by the release of the Mutant Ape Yacht Club NFT series;

2. The second time is from late January to early February 2022. This trading peak may be related to the launch of the LooksRare NFT market.

After these two trading peaks, NFT trading activity began to decline significantly from mid-February, from $3.9 billion in the week of Feb. 13 to $964 million in the week of March 13 — this is a drop from 2021 Lowest weekly level since the week of Aug. 1. However, when the time came to mid-April 2022, the transaction volume of the NFT market began to recover again, this is because the “boring ape” BAYC launched the metaverse project Otherside.


It is worth mentioning that despite the ups and downs of NFT trading volume, the number of active buyers and sellers has always continued to grow. In Q1 2022, there were 950,000 unique addresses buying and selling NFT T, up from 627,000 in Q4 2021, in fact, the number of active NFT buyers and sellers has increased every quarter since Q2 2020 rise. As of May 1, the number of addresses with NFT transactions in Q2 2022 reached 491,000. In addition, since March 2021, the number of active NFT series on OpenSea has also continued to grow, which has basically remained at more than 4,000 at present, and once exceeded 5,000 at the peak.


Who is using NFTs?

Analysis of the network traffic of mainstream NFT platforms in the market shows that NFTs attract users from all over the world, with Central Asia and South Asia leading in the number of NFT investors, followed by North America and Western Europe. It should be noted that since the beginning of 2021, no region has access to NFT platforms that have exceeded 40% of all network traffic, which means that NFT popularity is very average across the globe.


So, who is investing in NFTs? The data shows that the vast majority of NFT transactions are driven by retail investors, as NFT transactions worth less than $10,000 make up the majority. From January to September 2021, the proportion of NFT transactions in the size of $10,000 to $100,000 increased significantly, and gradually stabilized after October 2021.

When the market was hot, institutional NFT investment began to decrease significantly


However, if we analyze the NFT market in terms of transaction value rather than transfer volume, institutional NFT investors have changed.

From January to September 2021, institutional investor participation in the NFT market is still relatively active, and even accounts for the majority of trading activity (more lavish) in certain weeks. For example, in the week of October 31, 2021, institutional NFT transactions accounted for 73% of all NFT market transactions, especially several NFTs in the Mutant Ape Yacht Club series were bought at high prices.


However, as is the case with the NFT market as a whole, the growth in institutional NFT transactions has not continued.


The data shows that NFT purchases by institutional investors increased weekly between late November 2021 and mid-February 2022, but then dropped abruptly, decreasing to 1,889 in the week of February 13, and February 20. Day dropped to just 473 transactions for the week. As of April 17, 2022, institutional NFT activity has not yet reached winter 2021 levels. Of course, the decline in institutional activity during this period also roughly coincides with the overall decline in interest in NFTs in general.

(The above content is excerpted and reprinted with the authorization of partner Mars Finance, original link | Source: Odaily Planet Daily)

Disclaimer: The article only represents the author’s personal views and opinions, and does not represent the objective point and position of the block. All content and opinions are for reference only and do not constitute investment advice. Investors should make their own decisions and transactions, and the authors and blockers will not be responsible for the direct and indirect losses caused by investors’ transactions.

This article Chainalysis report: Who is holding and investing in NFTs? First appeared in Block Guest.


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