Non-Fungible Token (NFT) wash trading volume recorded its fourth consecutive growth during the month of February, according to a recent CoinGecko report.
NFT wash trading
Wash trading is an illegal practice where investors buy and sell their assets at the same time for the same price. Wash trading doesn’t provide financial returns. However, it boosts market volume, which can be used to manipulate price levels. NFT wash trading can happen between two NFT holders who agree on the terms or a single NFT holder who sells from one address and purchases from another.
In February, the NFT wash trading volume on the most significant six NFT marketplaces reached an aggregate of $580 million — marking a 126% increase from January’s $250 million.
The last time NFT wash trading volume recorded a decrease was in November 2022, when it fell to as low as $190 million from October’s $330 million. Since then, the total NFT wash trading volume has been growing.
Regardless of the steady increase, the current volume of NFT wash trading appears very small compared to one year ago — when it was as high as $11,560 billion in January 2022.
Among the six largest NFT marketplaces, LooksRare, Blur, and X2Y2 contributed the most significant shares in NFT wash trading volume.
X2Y2 single-handedly accounted for almost half of the NFT wash trading by recording $280 million in wash trading volume — making up over 49% of the aggregate amount.
Blur and LooksRare also contributed $150 million and $80 million — accounting for 27.7% and 15.1% of the total volume, respectively. OpenSea also contributed $42.57 million, while Magic Eden added another $590,000 to the total NFT wash trading in February.
The NFT market proved one of the most resilient crypto fields to the recent crypto winter. The NFT sphere has been on a recovery trajectory over the past few months, except for the current hit it received from the U.S. banking crisis. Despite this, recent data revealed that the NFT market returned to its pre-Luna crash levels in February.
The CoinGecko report also noted that the increase in NFT wash trading volume corresponds with the overall rise in NFT trading volume. According to the data, NFT trading volume has steadily increased since October 2022.
However, the growth rate of the increase has been considerably more prominent in the past three months. Moreover, the numbers prove that Blur is one of the most significant contributors to the rise in NFT trading volume.