Blockchain analytics firm Chainalysis’ latest report indicates that NFT activities have slowed down in 2022, with growth beginning to pick up again since mid-April. The document also noted that growing interest derived from retail investors – as shown in the rising number of small-sized transfers – has not yet overridden the market share dominated by institutional investors.
NFT Activities Stabilized in 2022
In the wake of the impressive growth in 2021 – culminating in November – the NFT market has gone on a downturn trajectory along with the broader market from January to March.
As demonstrated in transaction volume, trading activities have since recovered in the mid of April. Until May 1st, collectors had sent over $37 billion to NFT marketplaces as of 2022 – only $3 billion less than the total volume as documented for 2021, according to the latest report by Chainalysis.
The report noted that the total transaction volume bottomed on the week of March 13th and soon bounced back up with the launch of Bored Ape Yacht Club’s metaverse project that attracted immense capital from institutional investors.
“Despite these fluctuations in transaction volume, the number of active NFT buyers and sellers continues to grow.”
The NFT growth trend is also reflected in the increasing number of active addresses. 950,000 unique wallets have bought or sold an NFT in Q1, up from 627,000 in Q4 last year, the report noted. Also, new NFT addresses reached 491,000 within the first month of Q2, indicating that the number of participants has continued its quarterly growth trend.
Whales Continued to Collect Famed NFT Projects
The document stated that the vast majority of transactions are below $10,000 worth of digital assets. Meanwhile, the number of whale-sized transactions between 10K and 100K has stalled in the first quarter. In terms of total transaction value, however, institutional transfers have made up the majority of trading activities.
In particular, whenever notable NFT projects came on the scene, the number of institutional transfers would spike. The report gave an example as such:
“During the week of October 31, 2021, institutional transfers made up 73% of all activity, largely due to the purchase of several NFTs in the Mutant Ape Yacht Club collection.”
Another key takeaway from the report is that NFTs have continued to capture global audiences, with no region making up more than 40% of the traffic volume. Central & Southern Asia – slightly ahead of North America and Europe – has accounted for roughly 20% of the overall volume as of 2022.