According to a report from Chainalysis, investors of Non-Fungible Tokens (NFTs) have already sent more than $37 billion in value to NFT marketplaces this year as of May 1st, 2021. The figure is on track to equal and surpass the $40 billion sent in all of 2021.
The report explains that since the beginning of last year, NFT transaction volume has grown considerably, but the overall growth of the industry has been inconsistent. It reads, “NFTs saw explosive growth in 2021, but this growth hasn’t been consistent and has leveled off so far in 2022.”
The report outlines that NFT transaction volume occurs sporadically and has been in a downturn since mid-February. The NFT market has since made a brief recovery as of mid-April, most likely due to the recent hype around Moonbirds and the Bored Ape Yacht Club’s metaverse project Otherside.
What you should know
Despite the short-term fluctuations in NFT transaction volume, the number of people around the world buying and selling NFTs remains strong, with 950,000 unique addresses buying or selling NFTs in Q1 2022.
So far in Q2 2022, As of May 1st, 491,000 unique addresses have transacted with NFTs, putting the market on track to continue its growth trend in the number of participants.
By analyzing the web traffic of the major NFT marketplaces, Chainalysis determined that NFTs attract users from all corners of the globe, with Central and Southern Asia leading the charge, followed closely by North America and Western Europe.
Africa came in last, with its usage in the continent under 10%.
The report contradicts the conclusion of a recent article published by the Wall Street Journal, which claimed that NFT sales were flatlining.
The article stated that “The NFT market is collapsing,” yet, in the same week, the top five NFT collections alone accounted for more than $1 billion in primary and secondary sales.
Chainalysis’ report also comes the day after Coinbase’s launch of its in-house NFT marketplace failed to generate any major interest. On-chain data showed that a mere 150 transactions occurred on Wednesday, the first day of trading, with just $75,000 in volume moving through the platform. However, this is a pilot program with only few participants.
On institutional involvement in the space, the report stated, “Between late November and mid-February, institutional NFT purchasing grew each week, reaching 1,889 transactions the week of February 13, after having spiked to 2,739 two weeks prior.
“Institutional NFT activity fell abruptly after that, dropping to just 473 transactions during the week of February 20. As of April 17, 2022, institutional NFT activity has yet to reach the levels it did in the winter of 2021. This period of reduced institutional activity also roughly coincides with what appears to be an overall decline in interest in NFTs generally.”