Despite the fortunes created in the non-fungible token (NFT) market, only 28.5% of NFTs purchased at launch turned in a profit. The data are from the OpenSea NFTs sales platform, released by Chainalysis.
On the other hand, more than 65% of NFTs purchased on the secondary market result in profit. In this market, users buy and sell NFTs from each other.
In other words, only one in four newly lied NFTs makes a profit. The mint (minting, in English) is the name given to the process of creating an NFT. After creation, the token goes through the first sale, usually made by the artist himself or on some platform.
In a way, the mint works like the public offering of shares on the stock exchange (IPO), whose initial purchase is made under reservation. IPO processes are often criticized because of high share values, which leave little safety margin for profits.
For example, among the 46 Brazilian IPOs in 2021, only 19 showed positive profitability up to the month of September. In other words, only 41.3% of the total rate is slightly higher than the profitability of NFTs.
Chainalysis cites winning strategies
While NFT launches prove unprofitable, Chainalysis has nevertheless noted that certain tactics can lead to more success. For example, buy the tokens on the secondary market and take advantage of any discount opportunities.
Another possibility is to take advantage of NFT projects that have a stronger community. In this sense, very active projects on Telegram or Discord allow discounted NFTs to have a better chance of success.
That’s because these followers will promote the project on social media, marketing the tokens before its launch. With very active word-of-mouth advertising, projects save on advertising and advertising costs, facilitating purchases.
“More than anything else, NFTs are run in the community and by word-of-mouth growth. Look at just about any successful NFT project, and you’ll likely find servers on Discord and Telegram full of enthusiasts promoting the project. This is by design,” said Chainalysis.
The report also noted that users who make this strategy profited on 75.7% of purchases, while those who bought NFTs without this strategy profited on just 20.8%.
By 2021, nearly 80% of NFT transactions are at the retail level, meaning they are worth less than $10,000. Which proves that not every NFT will be the new CryptoPunks, for example, whose portfolio has already handled US$ 3 billion since 2017.