2022 Annual Overview: In-depth Analysis of NFT Whale Movements

Author: NFTGo Research

Looking back over the past year, we have seen many new scenarios, applications, and changes in the NFT space. Players buying and selling NFTs have also made some new moves. Therefore, we have collected data from the largest players in the NFT industry in 2022—whales—and conducted corresponding analysis and interpretation.

The term "whale" is used to describe individuals or organizations that hold a large number of specific NFTs, typically possessing high-value NFT assets (worth at least $1 million). We can usually determine whether they are whales based on their behavioral characteristics (such as the scale of funds and fund movements). As of now, whales hold NFT assets worth 1.25 million Ethereum, accounting for 12.11% of the market share.

At the same time, this group has on-chain influence (for example, traders follow the on-chain behavior of whales, and project teams airdrop to whale wallets for exposure), so whales are often the initiators of certain events and serve as a barometer for market trends. For instance, in November this year, franklinisbored.eth continuously sold BAYC at low prices:

Additionally, in April this year, whales rushed to register ENS domain names, causing the prices of digital domains to soar.

By analyzing the trends of whales, we can uncover the underlying motivations behind the market and restore the true appearance of the market.

Whale Movements and Analysis This Year

January is the month of whale frenzy

The time span can be divided into two phases:

January of this year was the most active month for whale trading, setting a record for the highest monthly transaction volume, with the whale group injecting $290 million into the NFT market while also holding nearly $59.86 million in NFT assets. The whale group significantly boosted the trading volume of the NFT market and attracted more public attention to the NFT market.

This wave of NFT trading continued into February, with the whale group still bringing a net inflow of $54.16 million to the NFT market. However, in March and April, there was a sharp decline in net inflow (March saw a 55% decrease compared to February, and April saw an 88% decrease compared to March), indicating a risk of turning negative for the net inflow of whales. This downward trend was influenced by hot events in May, which sparked another trading frenzy, leading whales to bring a net inflow of $59.13 million to the market. This also indirectly proved that this year's NFT market was significantly affected by event-driven speculation.

Whales collectively flee the market in May-June

In May and June, influenced by the overall market, whales significantly reduced their capital flow in the NFT market. Buying and selling funds steadily declined from $30 million in June to $10 million in December, showing a linear downward trend.

In addition to the scale of funds, after May, the NFT market also began to see a situation where the selling scale of whales consistently exceeded the buying scale, with net inflow turning negative multiple times. Although some whales began to sell in May, the real capital outflow occurred in June, with a total net outflow of $1.254 million. June became the time when most whales exited the NFT market. The following chart shows the capital flow statistics of whales after June, indicating that the scale of funds flowing out of the NFT market far exceeded that flowing in.

The following chart shows the trading activity of whale [0x6611fe71c233e4e7510b2795c242c9a57790b376](), which currently holds $4,441,509.32 in NFT assets. After June, it stopped buying and only engaged in selling.

Still left with $160 million in the NFT market

Corresponding to this year's trend of "turning from bull to bear," the whale group made a large-scale entry into the NFT market at the beginning of the year and then executed a large-scale exit mid-year.

The above chart shows the investment trend of whales in the NFT market this year. The whale group has cumulatively invested nearly $1.1 billion in the NFT market this year. As the market trend continues to change, the invested funds have begun to gradually withdraw from the NFT market. As of now, 85.5% of the funds have been withdrawn from the NFT market, but there is still $160 million remaining, most of which includes long-term assets and utility assets led by blue-chip NFTs, laying the groundwork for the future development trend of NFTs.

Analysis of Whale Behavioral Characteristics

Intermittent Explosions

The chart shows the buying trend of whale funds from January 2022 to December 2022. From January to April this year, whale funds exhibited characteristics of "intermittent explosions," with multiple instances of large-volume purchases. This behavioral characteristic mainly emerged in response to speculative events in the market at that time, as indicated by the marked time periods which correspond to peak trading intervals. The following chart ranks the top NFTs and quantities purchased by whales at each trading peak.

How crazy were whales on May 1st?

May 1, 2022, was the most active trading day for whales this year. On this day, whales engaged in frequent buying and selling transactions, purchasing NFT assets worth $70,909,493, including $25,439,910 of Otherdeed for Otherside. Additionally, there was a total of $46,148,230 in NFT combinations from the YugaLabs series, including Bored Ape Yacht Club, Mutant Ape Yacht Club, Meebits, Doodles, Bored Ape Kennel Club, and [CryptoPunks]().

In addition to a large number of purchases related to the series of NFTs, on this day, whales sold $8,027,643 worth of Otherdeed. Due to the rarity affecting individual NFT prices, this led to record-breaking transactions for Otherdeed. Currently, the top 8 highest transaction records for Otherdeed were all set in May. On May 1 alone, the average selling price of Otherdeed by whales reached $35,208, resulting in significant profits for many whales.

The purchase ratio of Otherdeed and related NFTs accounted for 60%, and this "concentration of purchases of a single asset" led to a significant rebound in the overall data for May, approaching the highest trading activity of the year. This also created a phenomenon in the market where "besides Otherdeed, there were no other hot topics," making it difficult for the market to maintain its heat. This "sudden" trading frenzy also became the last carnival for whales this year.

Sensing danger in advance

The above chart shows the market trading volume and whale selling volume. A comparison reveals that when this year's NFT trading volume peaked, the whale group engaged in significant trading activities, such as on January 31, April 3, and May 1. They all sold NFTs before the market began to decline, triggering panic selling in the market and causing a "stampede effect." Before the market reaches a turning point, whales often act more decisively to avoid risks, which usually attracts more users to follow suit, gradually amplifying the market trend.

Around May 1, the whale group sold nearly $20 million worth of NFT assets, after which the NFT market entered a prolonged bear market. Rather than saying they acted ahead of the market, it is more accurate to say that their actions influenced market trends, transforming the sequence of market transmission into "whale operations ------ retail investor operations ------ triggering market trends."

Flipping remains a way for whales to profit in a bear market

The above chart shows the daily inflow and outflow trends of whale funds, where the correlation coefficient between daily buying and selling volume of whales is 0.89, indicating a strong correlation. Whale buying and selling often occur simultaneously, which is understandable: when a whale buys an NFT and gains unrealized profits, they will sell high-value NFTs, often to another user with a "whale-sized" capital, completing the profit-taking and then continuing the buying and selling cycle for sustained profits.

Among the whales that made profits this year, many of their trading records show that their trading strategy is to buy quickly and sell quickly, with many transactions occurring on the same day. This characteristic became even more pronounced when the market conditions were less optimistic in the second half of the year.

For example, pranksy.eth has a PnL of 9.57K ETH and engages in a large number of buying and selling operations almost daily.

Whale Investment Preferences

Long-term blue-chip + short-term hot topics

The above chart shows the top 3 NFTs by buying volume from whales in each month of 2022. From the capital trends, we can see that whale preferences can be divided into two categories. The first category is long-term purchased NFTs: such as CryptoPunks and Bored Ape Yacht Club. The second category includes NFTs that ignite the market in the short term: such as Moonbirds and Otherdeed for Otherside.

In terms of frequency, CryptoPunks appeared 10 times in the table, Bored Ape Yacht Club appeared 8 times, and Art Blocks appeared 4 times. They are consistently prioritized by whales for purchase each month.

Next, Doodles, Moonbirds, Otherdeed for Otherside, and ENS served as reference standards for whale purchases in January, April, May, and September, respectively. They also represent the hot categories in the NFT market at that time: PFP, PASS, land, and Domain Name.

Examining whale investment characteristics by category

By categorizing the purchased NFT assets, we can derive the top 5 categories preferred by whales. We can also observe that whales are reenacting their consumption and investment perspectives from the real world in the NFT space.

PFP remains the most favored NFT category among whales, occupying a significant portion of their capital this year.

The social attributes of PFPs have led some whales to form binding relationships with the NFTs they hold. This is reflected in many KOLs choosing PFP NFTs as their social avatars. We also find that whale accounts typically hold at least one PFP NFT that has not been traded for a long time, which contributes to a portion of whale funds being locked in the NFT market.

Next is the PASS category, which somewhat aligns with the preferences of the whale group. Just as membership cards for celebrity clubs are given to social elites in real life, this consumption preference also occurs in the NFT market.

Many whales' purchases of Art NFTs resemble investments in collectibles, primarily based on the creators' past works and related backgrounds. Once purchased, they tend to hold them long-term.

For land NFTs, whales exhibit more distinct behavioral characteristics, generally summarized as purchasing based on the attributes of the land, such as proximity to certain landmarks and resource output of the land. This is more akin to the considerations of "real estate" investment regarding location and timing.

For domain NFTs, the capital movements of whales indicate two types of behavior: one is to register or purchase a domain with potential value and hold it until a suitable buyer appears or "domain monetization," while the other is to register or buy for personal use, treating it as a long-term holding.

Ranking of Favorite NFTs

The above chart ranks NFTs based on the amount of funds (in USD) invested by whales and the total number of purchases. Bored Ape Yacht Club and CryptoPunks lead other NFTs by a significant margin, becoming the most favored NFTs among whales. We also find that many transaction records are far above the floor price, indicating that aside from some "wash trading," whales are more inclined to purchase NFTs based on their preferences. This also proves that the price differences among blue-chip NFTs are caused by the individual art styles. The following chart shows the specific purchase points of whales in Bored Ape Yacht Club and CryptoPunks.

Other NFTs favored by whales besides blue-chips

The following chart ranks the top 40 NFTs based on the actual funds invested by whales. We find that in addition to blue-chip NFTs, whales are also keen on purchasing other NFTs.

Undoubtedly, whales are making significant strides in the entire NFT world. The number of whale holders is one of the standard indicators for assessing NFT projects. Whales bring capital and reputation to NFT projects, and their leverage can accelerate the growth of NFT projects. With the whale tracking feature of NFTGo.io, you can ride the waves with NFT whales in 2023.