NFT, or non-fungible token, transactions have stabilised in 2022 after a tumultuous 2021 that saw explosive, but inconsistent, growth of the virtual assets, a new report from Chainalysis found.
The digital asset boom has seen the value of some NFTs soar, as investors have gotten in on the trend. From food to art to real estate, NFTs have attracted attention over the last year and a half.
In 2022, collectors have spent over $37 billion in NFT marketplaces; in 2021, a total of $40 billion was spent.
NFT activity ebbs and flows month to month — in 2022 thus far, the value sent to NFT marketplaces continued its 2021 growth in January, entered a downturn in February, and then began to recover in mid-April, Chainalysis reported.
The first quarter of 2022 witnessed 950,000 sales or purchases via unique addresses, up from 627,000 in 2021.
“Overall, the number of active NFT buyers and sellers has increased every quarter since Q2 2020. In Q2 2022 as of May 1, 491,000 addresses have transacted with NFTs, putting the NFT market on pace to continue its quarterly growth trend in number of participants,” the report found.
The vast majority of NFT transactions are under $10,000 in cryptocurrency. NFT collector-sized transactions (between $10,000 and $100,000) grew significantly as a share of all transfers between January and September of 2021, but since then have stayed flat.
“This suggests that, for the time being, the addition of new retail NFT investors is keeping pace with the addition of bigger NFT investors,” the report found. “However, if we think in terms of transaction value rather than number of transfers, we see that NFT collectors make up a majority of activity. Institutional investors are nipping at their heels, and even make up the majority of activity in certain weeks when extremely large purchases have been made.”
For instance, during the week of October 31, 2021, institutional transfers made up 73 percent of all activity, largely due to the purchase of several NFTs in the Mutant Ape Yacht Club collection. More institutional-sized transfers followed in subsequent weeks, and since then, institutional transfers make up 33 percent of all activity, the report read.
However, as is the case with the NFT market as a whole, the growth of institutional-sized NFT transactions hasn’t been consistently sustained.
While NFTs are popular globally, they prove especially popular in Central and Southern Asia, and are also popular in North America and Western Europe.
