It is generally accepted that non-fungible tokens or NFTs bring tremendous returns to investors, however new research from Chainalysis shows that only a small subset of participants make the most of the profits.
Chainalysis noted thatThe maximum profit is provided by investing in several collections. It is important to note here the practice of creating a whitelist in which people can purchase new NFTs at a substantially reduced price.
Opensea users who turn into whitelist and then sell their newly created NFTs, profit 75.7% of the time, while non-whitelisted users have a 20.8% profitability. As such, making huge profits from NFTs without privilege is difficult.
We also find evidence of investor use of bots, which could block access to less sophisticated users and even lead to failed transactions for which they paid commissions.
NFT has burst into the public consciousness this year, and celebrities, sports teams and artists are pushing the new fashion trend in every possible way.
NFTs represent one of the most exciting and fastest growing sectors in the cryptocurrency world, and have become particularly popular with retail investors, according to the Chainalysis report.
However, those looking to collect and trade NFTs need to understand how competitive the market is.