2022 Overview: Diving Deep into Whales Movements

This article is an original Web3 annual review by Coinlive and NFTGO; please cite the source if you intend to reproduce the content.

Over the past year, various changes were seen in the scenarios and applications in the NFT space. As NFT partakers are now playing new moves, we have gathered the data of whales, the biggest players of the industry in 2022, and carried out analyses and interpretations accordingly.

The term "whale" refers to individuals or organizations that hold large amounts of specific NFTs and usually have a portfolio of valuable NFT assets (at least $1 million worth). In general, we are able to determine a holder's whale qualification with their behavioral traits like capital size and movement. As of today, whales possess $1.25M worth of NFT assets, accounting for 12.11% of the market share.

Distribution of Funds in the NFT Market. (Source: NFTGo.io)

Moreover, whales possess a voice on chain (e.g. traders follow the on-chain behaviors of whales, project owners gain exposure by airdropping whale wallets), so they are often the triggers of some events and a barometer reflecting market trends. A good instance of this can be seen in November when franklinisbored.eth continuously dumped BAYC at a low price.

https://nftgo.io/account/ETH/0xed2ab4948ba6a909a7751dec4f34f303eb8c7236/activity

Another example is that in April this year, the ENS domain name registration craze drove the price of digital domain names up rapidly.

https://nftgo.io/collection/ens-ethereum-name-service/overview

By analyzing the trends of whales, it is possible for us to unveil the underlying drivers of the market and restore the market to its true state. (NFTGo.io has a free leaderboard dedicated to whales: https://nftgo.io/analytics/leaderboard/whales)

2022 Whales' Trends and Analysis

January: A month of celebration

Buy-sell Trend of Whales (Monthly). (Source: NFTGo.io)

There are two stages distinguished by time span. January 2022 saw the most vitality in whale trading, setting a monthly all-time high in terms of capital size. In particular, the whales community alone sent $290 million into the NFT market, while depositing close to $59.86 million in NFT assets. Whales have significantly pumped the trading volume of the NFT market and have successfully attracted more public attention.

Net Inflow Trend of Whales (Monthly). (Source: NFTGo.io)

This NFT trading boom continued in February, as whales continued to bring in $54.16 million in net inflows to the NFT market. Unfortunately, in March and April, net inflows plummeted (55% and 88%, respectively) and was likely to turn negative. However, May brought about another event that reignited the trading hype. Whales once again generated a net inflow of $59.13 million, which proves that the NFT market was greatly influenced by hype and speculation factors this year.

May-June: Whales fled the market en masse

May and June were impacted by the general market as whales significantly withdrew their capital commitment in the NFT market. Trading capital began to drop from $30M in June to $10M in December, demonstrating a linear decreasing trend.

Trend of Whales' Capital Size from June to December. (Source: NFTGo.io)

In addition to capital size, it was also observed that, since May, selling was consistently higher than buying and the net inflow of funds turned negative many times. Even though some whales had started to dump their assets in May, the actual flight happened in June, when a total of $1.254M was recorded in capital outflow. Hence, June saw most whales escaping the market. The following chart shows the capital flow statistics after June. We can see that the scale of capital outflow from the NFT market has been far greater than the scale of inflow.

Whale Capital Statistics from June to December. (Source: NFTGo.io)

The chart below shows the trading activity of the whale 0x6611fe71c233e4e7510b2795c242c9a57790b376. This whale holder has $4.4 million in NFT assets and has halted buying since June. As of now, this holder only sells.

https://nftgo.io/account/ETH/0x6611fe71c233e4e7510b2795c242c9a57790b376/activity

$160 million still left in the NFT market

Corresponding to the "bullish to bearish" market trend this year, the whale community jumped into the NFT market at the beginning of the year but made a massive exit mid-year.

A Comparison of Buy and Sell Volumes of Whales. (Source: NFTGo.io)

The chart above shows the investment trend of whales in the NFT market this year. This year, whales have invested a total of nearly $1.1 billion in the NFT market. However, as the market fluctuates, the funds invested have started to gradually exit the NFT market. To date, 85.5% of the capital has been withdrawn, but there are still $160 million left in the NFT market. Most of them are long-term assets and utility assets made up of blue chip NFTs, which has laid the groundwork for NFT development in the future.

Percentage of Whale Capital Invested This Year. (Source: NFTGo.io)

An Analysis of Whales' Behavioral Traits

Upsurges with intervals

Buy Trend of Whale Capital. (Source: NFTGo.io)

The chart shows the buying trend of whale capital from January to December of 2022. The trend from January to April is characterized by upsurges with intervals seen on whale capital, with high trading volumes occurring multiple times. This behavior is mainly based on the speculative events in the market at that time. As shown in the chart, the marked time periods are the peak trading intervals. The following chart shows the most-bought NFTs by whales and their respective quantities at each peak.

How crazy were the whales on May 1?

May 1, 2022 was the most active trading day of the year for whales. On this day, whales traded at a high frequency, buying $70,909,493 worth of NFT assets, including $25,439,910 in Otherdeed for Otherside, plus $46,148,230 in the Yuga Labs series that consisted of Bored Ape Yacht Club, Mutant Ape Yacht Club, Meebits, Doodles, Bored Ape Kennel Club, CryptoPunks, etc.

NFTs Bought by Whales on May 1, 2022. (Source: NFTGo.io)

In addition to buying a large number of associated NFTs, whales had sold a total of $8027,643 of Otherdeed on this day. Since rarity affects the price of individual NFTs, this has resulted in multiple record-breaking Otherdeed sales. The top 8 highest Otherdeed transactions were all made on May 1 alone. The average price of Otherdeed NFTs sold by whales on that day was $35,208, which brought about a large sum of profit for the whales.

Otherdeed's Price Ranking in May. (Source: NFTGo.io)

https://nftgo.io/collection/otherdeed/analytics/general

Otherdeed and its associated NFTs accounted for 60% of the total NFTs purchased. This "concentrated purchase of a single asset" caused a significant rebound in the overall data in May, which was close to the highest trading activity this year. Moreover, it had made Otherdeed to appear as the only source of hype on the market, making it impossible for the market to sustain such craze. This trading boom that started from the ground up was also the last whale frenzy of the year.

Composition of NFTs Bought by Whales from April 30 to May 2. (Source: NFTGo.io)

Detecting danger in advance

Comparison of Market Volume and Whales' Sell Volume. (Source: NFTGo.io)

The chart above illustrates market volume and the sell volume of whales. When comparing these two trends, we found that whales traded heavily whenever market volume peaked. For example, on January 31, April 3 and May 1, they dumped their NFT assets before the market downturn, causing panic selling in the market and triggering a "stampede effect". Prior to the market's inflection point, whales tend to be more decisive in response to risks, which usually attracts more traders to follow, thus gradually amplifying the trend.

Around May 1, the whale community sold nearly $20 million of NFT assets, and the NFT market has then entered a prolonged bear market. Rather than acting ahead of the market, it is much more logical to say that it was their actions that influenced the market trend. Whales have transformed the order of market transmission to "whale operation - retail operation - triggering market trends".

Flipping remains a profiting method for whales amidst the bear market

Daily Inflow and Outflow Trends of Whale Capital. (Source: NFTGo.io)

The chart above shows the daily trend of the inflow and outflow of whale capital, in which the correlation coefficient between the daily buy volume and the daily sell volume of whales is 0.89 — a strong one. The buying and selling activities of whales often occur together, which is not difficult to understand: when a whale buys NFT and gains floating profit from it, he will sell the NFT at its higher value. More often than not, another trader with whale capacity will buy from the said seller. Therefore, the seller will now obtain his profit from the transaction and repeats the cycle to gain continuous profit.

Scatter Plot for Buy Volume/Sell Volume

Among the whales that made profits this year, many of their trading records show that the trading strategy was to buy and sell quickly, and many even bought and sold on the same day. This feature was even more prominent in the second half of the year when the market was less optimistic.

For example, pranksy.eth, with a PnL of 9.57K ETH, conducts heavy buying and selling almost on a daily basis.

https://nftgo.io/account/ETH/0xd387a6e4e84a6c86bd90c158c6028a58cc8ac459/NFT

Whales' Investment Preferences

Blue chips for long term + hypes for short term

The chart above shows the statistics of the top 3 NFTs in terms of the capital spent by whales in each month of 2022. From this, we can easily identify the two preferences of whales. The first category is NFTs bought for long-term plans like CryptoPunks, Bored Ape Yacht Club. The second category is NFTs bought due to short-term market craze like Moonbirds and Otherdeed for Otherside.

Distinguished by the frequency of appearance, CryptoPunks, Bored Ape Yacht Club, and Art Blocks appeared 10 times, 8 times, and 4 times respectively. They can be seen on the list every month and are the preferred NFTs of whales.

Next on the list are Doodles, Moonbirds, Otherdeed for Otherside, and ENS, which are the reference standards for whales' purchases in January, April, May, and September respectively. These NFT projects represent the most popular categories in the NFT market at the time: PFP, PASS, land, and domain name.

Gauging whales' investing traits through NFT categories

By categorizing whales' NFT assets, we can come up with the top 5 NFT categories favored by this community. Besides, we can also witness the process of reenacting real-world consumer investments in the NFT space.

PFP is still the favorite NFT category of whales, occupying a large proportion of the capital invested this year.

The social attributes of PFP have allowed some whales to form a binding relationship with the NFTs they hold. This is reflected by the fact that many KOLs choose PFP NFTs as their social avatars. Furthermore, we also found that whale accounts will hold at least one non-trading PFP NFT for a long time, thus allowing some of the funds of the whales to be deposited in the NFT market.

Secondly, there is the PASS category. PASS cards cater to the preference of whales to a certain extent similar to how celebrity club memberships go to socialites in real life. The same consumer preference happens in the NFT market.

Many whales view Art NFTs like investing in collectibles. Decisions are made based on the creator's past work and background. Once purchased, whales will hold them for a long time.

As for the purchase of land NFTs, whales demonstrate more distinct behavioral traits, which are generally summarized as graded purchases based on the attributes of the land. These attributes include the distance to certain landmarks and the resource output of the land, which are more in line with the location and timing considered in "real estate" investment.

Additionally, whales show two different types of behaviors when venturing into domain name NFTs. One is to register or buy a potentially valuable domain name and hold it until the right buyer comes along or "monetize" it, while the other is to register or buy it for their own practical use and hold it for the long term.

Favorite NFTs ranking

The ranking above is based on the buying capital (in USD) of whales. Bored Ape Yacht Club and CryptoPunks are one rank ahead of other NFTs and are the favorite NFTs of the whale community. Also, we found that many of the transactions were traded at a price much higher than the floor price, which means that whales tend to buy these NFTs based on their preferences rather than some click-farming type of transactions. In turn, this also proves that the prices of blue-chip NFTs are different due to their uniqueness of style. The chart below shows the specific buying points of whales in Bored Ape Yacht Club and CryptoPunks.

https://nftgo.io/collection/bored-ape-yacht-club/overview

https://nftgo.io/collection/cryptopunks/overview

Besides blue chips, what are the other NFTs favored by whales?

Here are the top 40 NFTs sorted by the amount of whale investments. We found that besides blue chip NFTs, whales are also keen on buying other NFTs.

There’s no joke in that whales are taking the NFT world by storm. The number of whale holders is the standard metric for evaluating NFT projects. Whales bring their capital and reputation to NFT projects. The leverage that whales have can accelerate the growth of NFT projects. With NFTGo's Whale Tracking feature, you can ride the waves with the NFT Whales in 2023.