While the popularity of non-fungible tokens (NFTs) clearly skyrocketed last year, new research from Chainalysis, the blockchain data platform, indicates that while activity is stabilising, spending through 2022 is on track to reach all-time highs. The report found collectors have sent over US$37 billion to NFT marketplaces in 2022 as of May 1, putting them on pace to beat the total of US$40 billion sent in 2021.
“NFTs have been one of the most dynamic and prominent parts of Web3 over the last two years,” said Ethan McMahon, Economist at Chainalysis. “To a large extent, the current excitement around NFTs stems from their utilisation in buying and trading digital art. But the potential of this technology is far greater as it can be used to not only give the holder ownership over the digital data, or media associated with the token, but also real-world assets.”
As the popularity of NFTs continues to grow, so too has the number of active NFT buyers and sellers. In Q1 2022, 950,000 unique addresses bought or sold an NFT, up from 627,000 in Q4 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 went on to analyse the monthly share of internet traffic to NFT marketplaces by geography which revealed that while some regions are more active than others, the fact that no region has made up more than 40% of all web traffic since the beginning of 2021 suggests that, like cryptocurrency as a whole, NFTs have captured a global audience. In the Middle East, web traffic to NFT marketplaces spiked in mid-2021, and has since stabilised, accounting for around 5% of total global traffic.
By analysing trends in transaction size, the research from Chainalysis also shed light on who’s investing in and collecting NFTs. “While there have been some significant monthly fluctuations, for most part we see that NFT collectors — with a transaction size between US$10,000 to US$100,000 — make up the bulk of activity. Institutional investors — those with transaction values greater than US$100,000 — are, however, nipping at their heels, and even make up the majority of activity in certain weeks when extremely large purchases have been made,” said McMahon.
