• 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.


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.

Cryptos feed Join Telegram

Recommended content

Recommended Content

Editors’ Picks

Here’s the list of crypto exchanges that will support Terra’s LUNA hard fork

Here’s the list of crypto exchanges that will support Terra’s LUNA hard fork

Cryptocurrency exchanges are on board Terra’s LUNA hard fork and Do Kwon’s plan for the Terraform Labs token’s rebirth. Do Kwon has garnered support from leading cryptocurrency exchanges for the new Terra chain. 

More Terra News

Breaking: Ethereum breaks below $1,900 as selling pressure accelerates

Breaking: Ethereum breaks below $1,900 as selling pressure accelerates

Ethereum dipped below the $1,900 support level over the past few hours. A decisive close below such a vital demand zone will put ETH at risk of a 38% correction toward $1,200. 

More Ethereum News

A big price move is coming for Binance Coin; here’s what to look out for

A big price move is coming for Binance Coin; here’s what to look out for

A brief technical and on-chain analysis on Binance Coin price. Here, FXStreet's analysts evaluate where BNB could be heading next. 

More Binance Coin News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Cryptos Ready - set - RALLY!

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Cryptos Ready - set - RALLY!

Bitcoin price, Ethereum and other cryptocurrencies are stabilising after the cryptocurrency space got slaughtered last week and two weeks ago.

More Bitcoin News

Bitcoin: The last rebound before capitulation

Bitcoin: The last rebound before capitulation

Bitcoin is showing bullish signs in the lower time frames, which can be taken advantage of by traders in the next couple of days. But looking at BTC from the higher time frames suggests that the bottom is not in yet.

Read full analysis