80% of NFT Transactions are done by Retail Buyers in 2021

Chainalysis said in its report that over 80% of all the NFT transactions in 2021 are made by retail customers (worth below US$10,000) during Jan-Oct 2021. 

Chainalysis blockchain analytics firm has said in their December 6 report titled  “The 2021 NFT Market Explained” that over 80% of all the NFT (nonfungible token) transactions in 2021 are made by retail customers. The report has categorized all transactions below US$10,000 as “retail” after studying on-chain data from January 2021 to October 2021. 

It has also underscored that there has been an increase in the collector-sized NFT transactions (worth between US$10,000 and US$100,000) as the year progressed. The collector-sized NFT transactions were hovering around 6% in March 2021, which increased to 19% by October 31, 2021. This indicated that the number of larger collectors in the nonfungible space has increased significantly as the year progressed. 

During the concerned period, the institutional-sized transactions (worth more than $100,000) accounted for:

  • Less than 1% of all transfer
  • 26% of the actual trading volume

During Jan-Oct 2021, retail NFT buyers were the dominant ones. The collector-sized transactions started to increase in Sept 2021. However, since March 2021, collectors and institutions accounted for the majority share in terms of NFT dollar-denominated transfer volume. During the time period studied, the share of different categories of buyers in terms of volume are:

  • Collector-sized transactions: 63%
  • Institution-sized transactions: 26%
  • Retail-sized transactions: 11%

The report also said:

“The data shows that the NFT market is far more retail-driven than the traditional cryptocurrency market, where retail transactions make up a negligible share of all transaction volume.”

A report from Cointelegraph Research has predicted that the total NFT sales expected throughout 2021 is a record US$17.7 billion. Around US$300 million NFT sales took place during last week alone. A quarter of this NFT sales last week came from the metaverse land purchases at The Sandbox. According to Chainalysis, throughout 2021, over US$26.9 billion in cryptocurrency was sent to ERC-721 and ERC-1155 contracts (NFT’s Ethereum standards). 

The Chainalysis report went on to observe:

“Just 28.5% of NFTs purchased during minting and then sold on the platform result in a profit… The data suggests it’s nearly impossible to achieve outsized returns on minting purchases without being whitelisted.”