More than 80% of all non-fungible token (NFT) transactions were worth less than $ 10,000 in 2021 according to Chainalysis, which classified them as "retail" in recent research.
December 6 report from blockchain analytics firm Chainalysis titled "2021 NFT Market Explained " Detailed NFT transaction trends throughout 2021. Chainalysis researchers studied on-chain data between January and October 2021.
While retail transactions accounted for more than 80% of all NFT transactions on any given day in 2021, picker-size transactions increased from 6% in March to 19% by October 31, indicating an increase in the largest pickers as the year progressed.
Institutional-size transactions represented less than 1% of all transfers, but constituted 26% of the actual volume of operations during the period, he added.
A retail-size transaction is worth less than $ 10,000, while a collector-size transaction is worth between $ 10,000 and $ 100,000. An institution-sized transaction is worth more than $ 100,000 according to research.
The graph below shows the dominance of retail transactions throughout the year from January to October, with a definite rebound in collector-size transactions beginning in September.
The share of total transfers was comprised primarily of retail trade, but collectors and institutions have made up the majority of the volume of transfers denominated in NFT dollars since March. Collector-size transactions accounted for 63% of volume and institution-size transactions for 26%, meaning that retail transfers reached 11% of volume for the time period studied.
The researchers contrasted the NFT market with the broader cryptocurrency market, where retail transactions account for a much smaller proportion of total transactions.
"The data shows that the NFT market is much more retail-driven than the traditional cryptocurrency market, where retail transactions account for a negligible part of all transaction volume."
The earning potential associated with NFTs was one of several factors that drove the adoption of cryptocurrencies through 2021. That is evidenced by the record $ 17.7 billion in NFT sales expected until 2021, according to a report by Cointelegraph Research.
Just in the last week NFT sales rose to $ 300 million, nearly a quarter of which comes from metaverse land purchases at The Sandbox.
Additionally, at least $ 26.9 billion worth of cryptocurrency has been sent to the ERC-721 and ERC-1155 contracts (the industry-dominant Ethereum standards for NFT) through 2021 according to Chainalysis.
Related: Binance Smart Chain and Animoca Brands form $ 200 million fund for GameFi projects
Whitelist the best for profit
Despite the huge amount of money being spent on NFT, the report indicates that "only 28.5% of NFTs bought during minting and then sold on the platform result in a profit."
Chainalysis suggested being whitelisted to increase the chances of making a profit from a newly minted NFT. Users who were whitelisted in a minting event at OpenSea they made profit 75.7% of the time compared to 20.8% who did so without being on the white list.
"The data suggests that it is almost impossible to achieve huge returns on mintage purchases without being on the white list."
However, NFTs bought on the secondary market after minting "make a profit 65.1% of the time," the report adds, suggesting that if one cannot get on the white list, it is better to wait for a collection. of NFT reaches a secondary market rather than participating in a minting event.
