Ethereum NFTs have gained the most clout in the crypto space. These NFTs have recorded sales of up to 69.3% for a single piece of artwork. Investors are moving towards owning NFTs as a form of long-term investment in addition to their cryptocurrency holdings. Although other blockchains are coming up where NFTs can be minted, the majority of it still happens on Ethereum.
This is why investors have flocked towards non-fungible tokens minted on the blockchain. Its growing popularity has led to some striking similarities with the pattern of holding seen in cryptocurrencies. For example, the same way whales are a thing in cryptocurrencies, there are also NFT whales, and new data coming out of the market shows that whales are dominating NFTs the same way they dominate cryptocurrencies.
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Whales Take The Lead On NFTs
Moonstream published a report on Github analyzing the movement of non-fungible tokens over the past six months. This time period has been very significant in the growth of the NFT space and the report had some interesting findings.
It found that over 80% of all non-fungible tokens are held by only 17% of wallets. Leaving less than 20% of NFTs for the rest of the market. NFT platforms, exchanges, and most importantly, whales, have been grabbing up non-fungible tokens at an increased rate over the past six months, putting them at an advantage over the rest of the market. This is mirroring the cryptocurrency market which shows similar figures for volume held by whales and smaller investors.
Moonstream analyzed over 7 million NFTs transactions for the past six months on the Ethereum blockchain. This analysis led to the conclusion that the remaining 83.29% of the NFT market holds only a handful of it.
Creating Room For Nuance
The data presented in the report included NFT platforms where investors buy and sell their NFTs. It is important to note that since these platforms also offer storage services, NFTs being stored on the platforms are factored into this.
Small-time NFT investors could very well decide to leave their acquisitions on these platforms to enable them to sell easily, much like cryptocurrency investors leaving their assets on exchanges in order to move very quickly with the market.
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In the report, Moonstream explains that more nuance is needed in the interpretation of the data presented, “as many of those owners are marketplaces and clearinghouses lie OpenSea, Nifty Gateway, and other platforms of the same ilk.”
Nevertheless, just like in any market, there are always stark inequalities. A small percentage usually controls the largest market share and given the barriers to entry in the non-fungible token market, small-time investors will control an insignificant portion of the market.
Featured image from Forbes, chart from TradingView.com