Only 1 in 4 NFTs Bought During Minting Result in Profit – Chainalysis

Data from the largest indispensable token (NFT) market, OpenSea, shows that only 28.5% of NFTs purchased during mining are profitable. On the other hand, over 65% of NFTs purchased from other users on secondary markets are profitable.

According to a report by blockchain analysis company Chainalysis, NFTs are “far from a safe investment,” and only 1 in 4 NFTs acquired during minting can make a profit for their owners.

However, they noted that certain tactics can lead to greater success.

Chainalysis claims that NFT projects that whitelist their loyal followers, collect them on a Discord or Telegram server and allow them to buy NFT at a discount will have a better chance of success. This is because these followers will be promoting the project on social media by promoting a project that has not yet been launched.

“More than anything else, NFTs are built on community growth and word of mouth. Look at just about any successful NFT project and you’ll likely find Discord servers and Twitter threads full of enthusiasts promoting the project. This was done on purpose, ”the report says. said.

The report also notes that it is nearly impossible for users to make significant profits from purchases made by minting unless they are whitelisted, and that:

users who “whitelist and then sell their newly created NFTs get a 75.7% return, compared to just 20.8% for non-whitelisted users.”

In addition, Chainalysis stated that NFT sales are coming from different regions, which suggests that the industry has achieved global popularity. While Central and South Asia, North America, Western Europe and Latin America lead the way, none of these regions has more than 40% market share.

Nearly 80% of NFT transactions take place at the retail level, meaning less than $ 10,000. However, in recent times, larger NFT transactions have become more common.

Part of NFT, created by the founder of the Silk Road darknet market, Ross Ulbricht, currently offers the highest rate of 666 Ethereum (ETH), or roughly $ 2.64 million at the time of writing. In addition, artist Beeple’s NFT recently raised $ 28.9 million.

The NFT market has seen explosive growth in 2021, with more than $ 26.9 billion in transactions processed this year, of which about $ 10.7 billion will come in the third quarter alone, according to decentralized app information provider DappRadar.

Launched in 2017, CryptoPunks is considered the most popular NFT project with over $ 3 billion in transactions since March 2021.

Meanwhile, Gauthier Zuppinger, co-founder of NFT tracking website, told Bloomberg that much of the minted NFT could be worthless.

“Perhaps 90% of the collections minted today are completely useless and meaningless,” Zuppinger said in mid-September.