- Blockchain analytics platform Nansen says the non-fungible token industry gives the impression of wash trading.
- Further rigorous study is required to identify incriminating evidence. However, something appears amiss in buying/selling behavior of new token creators.
- At non-fungible token marketplace OpenSea, sales crossed $1.5 billion over the past month, it is likely that "wash trading" practices are driving volume higher.
As NFT trading volume climbs higher, analytics firm assesses possibility of wash trading
Non-fungible token marketplace Open Sea has recorded $1.9 Billion in NFT sales so far in August 2021, nearly ten times the volume recorded in March. Ian Kane, a spokesman from DappRadar who tracks NFT sales, said:
What we have seen are a few NFT collections popping up in the last few weeks that have been very successful at launch and sold out. That activity has then filtered over to OpenSea, where buyers look to flip their NFTs for a higher price.
Analyzing NFT sales and the success of new token creators, Nansen, a blockchain analytics firm, pointed out that "something appears amiss."
Nansen has observed that NFTs are "spotted by profit-seeking practices." Though there is no incriminating evidence yet, the firm has noted that it is likely that they may uncover further details in the rigorous study.
Based on transaction patterns noted by Nansen, new token founders are buying large sums of their assets at a low price, which implies they are deliberately purchasing and selling the same back and forth. This creates an illusion of demand through "wash trading."
Ling Young Loon, a Nansen analyst, was quoted:
While something appears amiss, it definitely isn't incriminating evidence of wash trading because they aren't being sold directly to each other… the wallets that they eventually sell to may be related, but that would require a much more rigorous study.
Following payments giant Visa's purchase of a CryptoPunk – one of the oldest NFTs in circulation – for $150,000, several Chinese investors have purchased non-fungible tokens as digital art and collectibles.
Chinese Journalist Colin Wu reported purchases by Meitu founder Cai Wensheng. Meitu is a Chinese photo touch-up application.
Chinese Internet investors have bought CryptoPunk one after another. Meitu founder Cai Wensheng bought CryptoPunk #8236 with 125ETH. Feng Bo bought CryptoPunk#7252 for 1600ETH (approximately US$5.33 million). pic.twitter.com/LyGxNRORJX
— Wu Blockchain (@WuBlockchain) August 26, 2021
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Ripple on-chain metrics show bullish signs amidst legal struggle with SEC, XRP eyes recovery
Ripple made a comeback above $0.48 on Tuesday and hovers above that level in Wednesday’s European session. Ripple on-chain metrics such as transaction volume and Network Realized Profit/Loss have turned bullish, supporting a recovery in the altcoin.
Bitcoin price falls amidst German government transfers, miners activity
Bitcoin (BTC) extends correction on Wednesday and hovers around $61,000 after finding resistance near the $64,000 level on Monday. Recent on-chain data indicates heightened selling activity from Bitcoin miners early in the week.
Crypto Today: Bitcoin erases gains from end of June, Ethereum declines while Ripple holds
Bitcoin wipes out gains from the last week of June and falls below $60,000 on Wednesday. Ethereum and top altcoins ranked by market capitalization erased gains as the inflation outlook worsened. Ripple holds on to recent gains and hovers above $0.48 on Wednesday.
Three reasons why altcoins could shake off losses this week
On-chain data from Santiment shows that altcoins are currently in the opportunity zone, or generating buy signals. The top three altcoins in the buy zone are Basic Attention Token (BAT), Chromia (CHR), and Highstreet (HIGH), per Santiment.
Bitcoin: BTC price correction could end in July, according to seasonal data
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.