• Retail transactions (less than $10K) took up the bigger chunk of all NFT transactions all through 2021.
  • Collector-sized transactions led in transactional volume and whitelisted buyers had higher chances of turning a profit.

Non-fungible token (NFT) transactions worth less than $10,000 accounted for over 80 percent of all NFTs transactions on any given day in 2021, according to blockchain analytics firm Chainalysis.

Titled “The 2021 NFT Market Explained,” the firm’s Dec. 6 publication details this year’s NFT transaction trends. Its findings are based on research conducted between Jan. 21 and Oct. 21, 2021. The study classifies NFT transactions worth less than $10,000 as retail-sized, while collector-sized transactions are worth between $10,000-$100,000. Institutional-sized transactions are those worth over $100,000.

Leading after retail transactions, were collector transactions which took up 6 percent of the pie in March. This chunk, however, began increasing at the beginning of September and was at 19 percent by Oct. 31, indicating an increased NFT interest among collectors. Meanwhile, institutional transactions took up less than 1 percent of the total transfers.

But despite the low number of transactions, institutional NFT buyers held a considerable amount of actual trading volume. Both institutions and collectors have been holding the lion’s share of transfer volume since March. Collector-sized transactions made up 63 percent of the volume while institutional-sized transactions took up 26 percent. The remaining 11 percent belonged to retail transfers.

NFT research findings 2021

From the researchers’ perspective, their findings on retail NFT investors contrast those of retail crypto investors. Retailers take a bigger share of the total number of transfers in NFTs, while their contribution to the cryptocurrency equivalent is relatively quite small.

The data shows that the NFT market is far more retail-driven than the traditional cryptocurrency market, where retail transactions make up a negligible share of all transaction volume.

This year’s cryptocurrency adoption, according to research by Cointelegraph, has been driven by several factors. Among them is the earning potential associated with NFTs as shown by the record $17.7 billion sales expected this year.

In the past week alone, NFT sales tapped $300 million. Nearly a quarter of this amount came from The Sandbox metaverse land purchases.

Related: Institutional DeFi will go big in 2022 fueled by banks and NFTs: Chainlink’s Sergey Nazarov

Additionally, Chainalysis notes that this year, at least $26.9 billion in cryptocurrency has been sent to the contracts ERC-721 and ERC-1155. These two are the industry-dominant Ethereum standards for NFTs.

The importance of whitelists and secondary markets

But even then, “just 28.5% of NFTs purchased during minting and then sold on the platform result in a profit,” read the report. Users whitelisted on an OpenSea minting event made profits 75.7 percent of the time, in comparison to 20.8 percent without whitelisting.

The data suggests it’s nearly impossible to achieve outsized returns on minting purchases without being whitelisted.

Nevertheless, NFTs purchased on the secondary market after minting turned a profit 65.1 percent of the time, the report adds. This suggests that, in terms of profitability, it is better to purchase NFTs on the secondary market should one miss the whitelist.



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