- Data by the leading NFT marketplace OpenSea reveals that only 1 in 4 NFTs purchased during minting lead to a profit.
- On the other hand, 65% of NFTs traded in the secondary markets provide their owners with a profit.
- “NFTs are far from a surefire investment,” Chainalysis reported.
Data by the leading NFT marketplace OpenSea reveals that only 28% of NFTs purchased during minting result in a profit, while 65% of NFTs traded in the secondary markets provide their owners with a profit.
According to a report from Chainalysis, a major blockchain analysis company, NFTs “are far from a surefire investment” and only a small portion of NFTs can lead to a profit. More precisely, 1 in 4 NFTs purchased during minting lead to a profit.
However, the report mentioned that NFT projects can adopt certain tactics to increase their chance of success. According to Chainalysis, projects that “whitelist” their loyal fans, gather them in a Telegram or Discord server, and offer them the NFTs at a discount will be considerably more successful since those fans will faithfully promote the project and market it. The report said:
More than anything else, NFTs run on community and word-of-mouth growth. Look at virtually any successful NFT project, and you’ll likely find Discord servers and Twitter threads full of enthusiasts promoting the project. This is by design.
The report added that only whitelisted users can end up raking in substantial gains, arguing that it is nearly impossible for users to generate solid returns if they are not whitelisted. “OpenSea data shows that users who make the whitelist and later sell their newly-minted NFT gain a profit 75.7% of the time, versus just 20.8% for users who do so without being whitelisted,” the report noted.
NFT is Retail-Driven With Global Popularity
In the report, Chainalysis stated that more than 75% of NFT transactions are at the retail level, suggesting that they are less than $10,000. However, it noted that large scale NFT transactions are gaining more popularity.
NFTs selling for millions of dollars worth of crypto assets have become more commonplace in recent times. For instance, just recently, Beeple’s “Human One” NFT sold for $28.9 million worth of ETH. Chainalysis reported:
As of the week of October 31, 2021, NFT collector-sized transactions, meaning those between $10,000 and $100,000 worth of cryptocurrency, have risen to account for 19% of all NFT transactions, compared to just 6% at the beginning of March.
Meanwhile, the report said that NFT sales are well dispersed among various regions, implying that the market for digital collectibles has obtained global popularity. Though it noted that Central and Southern Asia, North America, Western Europe, and Latin America account for the largest share of the market.
Back in September, Bloomberg reported that massive NFT sales paint a deceptive picture of the NFT market. “Maybe 90% of collections minted today are totally useless and meaningless,” said Gauthier Zuppinger, co-founder of NFT tracking website NonFungible.com.