NFT, as a hot field in blockchain technology, has emerged as a trend in the blockchain world with its explosive momentum. Many people have been questioning: is this boom just a short-term market speculation or does it represent a new stage of development in the blockchain world? Despite the media declaring the demise of the NFT market, following the downturn in the trading market, the steady development and wide-ranging applications of NFT are being supported by improved infrastructure, mature technology, and continuous expansion of use cases.
So, how can we interpret and grasp the current development trends of the NFT market using objective data? This is a highly important and meaningful question for anyone interested in or involved in this field. To grasp the main thread in this information-explosive market, this article will analyze and interpret the data from the perspective of NFTScan.
NFTScan collects massive NFT data from 21 public chains, covering multiple dimensions such as multi-chain analysis, transaction data, real-time monitoring, and wallet addresses, providing users with a unique perspective to observe the NFT ecosystem from multiple dimensions.
Currently, as 2023 draws to a close, after experiencing a period of market sentiment dampening, the cryptocurrency and NFT fields have shown a significant upward trend, signalled by the frequent price increases of BTC and ETH, indicating market recovery. At the same time, the trading volume in the NFT field has started to soar, and the number of individual users (wallets) has also increased, indicating the continuous growth and maturity of the NFT industry.
1/ Macro Perspective
As of January 19th, NFTScan has accumulated and analyzed a total of 1,471,599,277 NFT asset data, 3,377,477 NFT asset contracts, 7,053,076,335 on-chain records, and a total transaction volume of $96,874,943,478. Furthermore, the on-chain NFT data is growing massively every day. In addition to this, NFTScan automatically collects data from 209 NFT trading markets, including Blur, Opensea, OKX NFT, etc., analyzing the number of contracts related to NFT trading protocols deployed on 21 blockchain networks. It has accumulated a wealth of on-chain trading data.
Source: https://www.nftscan.com/chain/detail
Observing the overall trading volume and transaction value trends in the NFT market can reflect the market’s activity level and development momentum. The growth in trading volume represents an increase in market participants and trading activities and can be seen as a direct reflection of market enthusiasm.
In the last quarter (Q4 2023), the NFT market showed a clear sign of recovery. Starting from late November, the overall transaction volume of the market began a significant rebound and has since maintained a relatively stable state. This means that after experiencing a downturn since mid-2023, the NFT ecosystem has entered a slow recovery trajectory. The market liquidity has improved, and participants’ interest and confidence in NFT assets are gradually being restored. If this upward trend continues, the NFT market will likely enter an upward cycle shortly. From the overall transaction volume data, it can be seen that the NFT market has gradually begun to climb out of its low point in the previous quarter and is now in a phase of moderate recovery, which is an encouraging positive signal.
If we further analyze the source of the overall transaction volume growth during this period, we can find that it is mainly concentrated on the Blur trading market. Looking at the linear graph of trading markets, Blur quickly occupied the market share starting in November and has been continuously expanding. In contrast, the trading volume and growth rates of other trading platforms have relatively slowed down, leading to a layered trend among different trading markets. In fact, since its launch in October 2022, Blur has rapidly become the primary trading place in the NFT market. In the context of the overall industry recovery, healthy competition will bring a positive cycle to the entire ecosystem to promote development.
2/ Real-Time Data Changes
In the rapidly changing NFT ecosystem, capturing and analyzing real-time data is crucial. By monitoring indicators such as real-time transaction data, floor prices, and holder distributions, we can more sensitively capture the latest trends of the NFT ecosystem, discover new market hotspots, and identify any anomalies on time. Specifically, we can: 1) grasp the latest market trends; 2) analyze data trends and changes; 3) identify abnormal fluctuations; 4) evaluate the impact of major events; 5) quantify trading strategies; and 6) conduct quick targeted analysis.
First, by tracking through NFT activity, we can have a clear understanding of which projects are involved in minting, purchasing, transferring, and burning through various trading markets. This provides an intuitive insight into the current market trends and the comprehensive flow of NFTs. Particularly, real-time transactions and minting reveal which projects are being heavily minted and traded, suggesting their popularity as newly minted or highly anticipated projects. Currently, we can see that Mint Genesis NFT is being extensively minted.
Next is tracking the trading volume and floor price of NFT collections. The floor price reflects the changes in the funding supply of a project or the entire market. When the floor price of a certain NFT rises, it indicates an inflow of funds and signifies market growth. By tracking the floor price curves of different types of projects, we can gain insights into the direction of fund flows. NFTScan’s Ranking list perfectly provides data on market capitalization, transaction volume, trading volume, and floor prices, integrating multiple key dimensions of data.
Based on the current 1-day data, Pudgy Penguins ranked first, has reached a floor price of 18 ETH, marking a new historical high. It is known that Pudgy Penguins has reached a collaboration with the well-known Hong Kong comic character “Old Master Q,” which has led to a significant increase in floor price. Based on the current market response, investors’ confidence in this project has significantly increased, and the rising floor price reaffirms the market attractiveness of NFTs.
3/ Holder Distribution
By tracking and analyzing the holder composition and distribution of representative NFT projects, we can gain a more comprehensive understanding of the development trends of the entire NFT ecosystem. Specifically, we can focus on the groups of holders for these top NFT projects, the distribution of holders for blue-chip NFTs, and the existence of any large holder addresses and their potential relationships.
Taking Azuki as an example, looking at the distribution of holders in NFT Collection Holders, 71.72% of the 3,106 holders only hold one Azuki, while 17.80% hold 2–3, predominantly consisting of individual retail investors, indicating low concentration. In terms of holding periods, 31.50% of items have a holding period of 3 months to 1 year, and 42.89% have held for more than 1 year, suggesting trust and a long-term positive outlook of the holders towards this project, with a relatively stable holding period distribution.
The top holder address, 0x29469395eaf6f95920e59f858042f0e28d98a20b, holds 513 Azuki. Through NFTScan Portfolio, it can be observed that this address:
- holds a significant number of top blue-chip NFT projects, in addition to Azuki, such as Pudgy Penguins, Bored Ape Yacht Club (BAYC), Meebits (MAYC), and Degods.
- Azuki represents only 13.17% of the total holdings in this address, second to Pudgy Penguins and BAYC, indicating that Azuki is just a small part of the portfolio of this top investor.
- From the holder distribution, it can be inferred that these core investors are highly optimistic about the entire NFT ecosystem and are the key driving force for the industry’s development. It is important to continue tracking the changes in the holdings of these large holders to grasp the core funding trends in the NFT market.
4/ Whale Actions
In the NFT market, assets are highly concentrated in the hands of a few whale wallets, and the actions of these whales often indicate the development trends of the entire market. Compared to ordinary investors, top NFT holders have advantages in terms of funds, information, and strategies. Therefore, tracking and analyzing the changes in holdings of these whale wallets can help capture the changing market trends on time. When multiple large holders are observed to adjust their positions or jointly increase their holdings in a particular project, ordinary investors may consider following the whales and find inspiration for their own investment decisions. This is also an intuitive and effortless way to understand the development of the NFT ecosystem. NFTScan Top Wallet allows for filtering and sorting based on factors like holding value, profit realization, or selling value, allowing for large-scale analysis and capture of whale actions.
In conclusion, compared to the feverish bull market period, the current NFT market ecosystem has experienced a decrease in trading activity and attention, and some low-quality projects and speculators are gradually exiting the market. However, this is also conducive to the NFT market returning to its value origins and allowing capable and sincere participants to continue building in this field. Many excellent NFT projects and ecosystem infrastructures are continuously maturing and progressing, and user communities are gradually expanding and growing, indicating that the NFT market is in a stage of self-adjustment and optimization rather than a true “death.”
Undoubtedly, we are still in the early stages of NFT as an asset class, making it extremely difficult to predict how everything will develop. Looking ahead, we have reason to believe that the NFT ecosystem will witness more technological breakthroughs and vigorous industry growth.
NFTScan is the world’s largest NFT data infrastructure, including a professional NFT explorer and NFT developer platform, supporting the complete amount of NFT data for 20 blockchains including Ethereum, Solana, BNBChain, Arbitrum, Optimism, and other major networks, providing NFT API for developers on various blockchains.
Official Links:
NFTScan: https://nftscan.com
Developer: https://developer.nftscan.com
Twitter: https://twitter.com/nftscan_com
Discord: https://discord.gg/nftscan
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