NFTs and Cryptopunks: In the middle of a bear market that many are calling the Crypto Winter, an unknown Ethereum address recently purchased an NFT for US$4.5 million.
CryptoPunk #2924 was sold for 3,300 ETH, one of the most significant NFT sales of this year. ‘Hoodie Ape’ #2924, as it is known, is ranked 38th by Rarity Tools and is one of only a handful of Ape NFTs in the CryptoPunks collection.
On-chain data shows that the NFT was sold to an NFT collector named ‘seedphrase’ in November 2020 for 150 ETH at the peak of Ethereum’s last bull run. The anonymous wallet was last active in May of 2017, leading some to suggest the purchase could be either wash trading, money laundering or an attempt to establish a tax loss.
However, there are clear precedents for legitimate high-value CryptoPunk sales. In February 2022, CEO of technology startup Chain, Deepak Thapliyal, bought CryptoPunk #5822 for 8,000 ETH, setting a new USD equivalent CryptoPunk sales record of US$24 million.
The cultural significance of the CryptoPunks, which have become almost synonymous with NFTs in general, has been recognised by brands, celebrities and even the traditional art world. Respected auction house Christie’s has sold nine CryptoPunks in total for US$16.9 million and is so bullish on NFTs that it recently launched its own platform.
CryptoPunks is an early NFT drop considered a “blue chip” project. With only 10,000 units in circulation, they remain one of the highest valued projects in total market capitalisation. Larva Labs, an early forerunner of the NFT market frenzy of the last two years, began the project in 2017. Yuga Labs, the creators of the Bored Ape Yacht Club, acquired Larva Labs’ IP rights in March 2022.
NFTs surviving the chilly weather?
Despite a drop in the overall volume of cryptocurrency and NFTs, there have been several high-ticket sales during the bear market. These include Pudgy Penguin #6873, which sold for USD 600,000 in August, as well as a Yuga Labs’ MAYC Mega Mutant purchased by Web3 startup Fragment for 1000 ETH (US$1.3 million) – their third Mega Mutant NFT.
Bull market darlings Doodles have also bucked the bear trend, pushing a 732% increase in trading volume on the heels of their US$700m VC fundraise and announcement of their collaboration with pop producer Pharrell Williams. Other projects are also finding traction.
QQL, a collaborative art experiment, recently raised nearly US$17 million in ETH after a successful token mint. Tyler Hobbs the visual artist collaborated with Dandelion Wist, a co-founder of generative art platform Archipelago, to allow holders to mint work into the QQL collection.
With ETH remaining severely discounted since its all-time-high of US$4,878.26 on November 10, 2021, NFT sales on all platforms and chains have slowed. OpenSea’s volume is hovering at around 10,000 ETH per day — a steep decline since the beginning of 2022.
The NFT community has however welcomed the high value CryptoPunk sale as a bullish signal for the NFT ecosystem, bringing further mainstream attention back to the space.