Published: July 20th, 2022
While all of the big name Ethereum NFT collections have seen their valuations crater amid the wider crypto market crash, CryptoPunks looks to be back on the front foot. Following two multi-million-dollar sales in rapid succession, the minimum or ‘floor’ price for one of the project’s NFTs has risen substantially over the past seven days.
On Monday 18th July, the floor price for CryptoPunks on secondary marketplaces jumped to above USD 100,000 for the first time since the crypto crash began in mid-May. Data from NFT Price Floor show the floor price for CryptoPunks at 84.84 ETH, or about USD 113,000 at time of writing.
That means the entry-level price for CryptoPunks leapt by more than 30 per cent in a week.
The rising value of Ethereum, up 27 per cent over the past seven days, is part of the story. However, when measured against ETH, the CryptoPunks floor beat Ether's rise by nearly 12 per cent over the past week and by nearly 26 per cent over the past month.
So far, it doesn’t signal a market-wide uptrend for high-value NFTs. Bored Ape Yacht Club has seen its ETH floor price fall by five per cent over the past week.
An NFT is a blockchain token that indicates proof of ownership for another asset, typically a digital product like a unique online profile picture, and sometimes an artwork, collectible, or video game item. The NFT market reached USD 25 billion in trading volume last year, adding roughly USD 20 billion more for the 2022 year-to-date.
CryptoPunks is one of the most successful projects in the NFT space. Parent developer Larva Labs launched the collection in 2017, first giving away its NFTs for free to stoke interest. Owning a CryptoPunks NFT has since become a status symbol for crypto enthusiasts and celebrities alike. To date, the collection has posted more than USD two billion in trading volume, including a record purchase worth USD 23 million recorded in March 2022.
This week’s leap in floor price was triggered by a pair of multi-million-dollar sales on July 13th and 15th. One NFT sold for USD 2.5 million (2,500 ETH) while another sold for USD 3.2 million (2,690 ETH) two days later. Both were hard-to-find ape avatars from the collection’s selection of 10,000 profile pictures.
As positive as it the CrytoPunks news is, the slumping NFT market still has to climb back significantly before any one event can signal a turnaround. Even at its current floor price, CryptoPunks has lost significant value over the course of this year. On January 3rd it peaked at USD 260,000 and was still hovering around USD 240,000 in early April. But like the Bored Apes and other popular NFT collections, prices have cratered in tandem with the broader cryptocurrency market slump.
In early March 2022, CryptoPunks valuations got a massive boost when Larva Labs announced it was selling the IP for the collection to Yuga Labs, the development house behind the Bored Ape Yacht Club collection. Once the news landed, sales of CryptoPunks skyrocketed.
Analysts said recent NFT buyers were looking to ‘flip’ their CryptoPunks purchases and gain a windfall on the secondary market. The thinking was that if Yuga Labs could make Bored Ape Yacht Club a sales phenomenon in under a year, perhaps they could achieve the same for CryptoPunks. In a press release, Yuga Labs said that after the purchase from Larva it would handover IP rights for individual CryptoPunks images to their respective holders, mimicking its approach to Bored Ape IP. For CryptoPunks’ holders that was a crucial
detail. Some had complained in the past that Larva Labs gave conflicting information about their freedom to trade their NFT images.
On top of surging sales volumes, the price of the least expensive NFT in the project rose by 12 per cent on the back of the announcement, reaching a floor price of more than 75 ETH or about USD 195,000.
Included in the deal was the IP for Larva Labs’ Meebits NFT project. Sales of Meebits NFTs also spiked at the time, rising to USD 19 million in trading volume for a whopping 500 per cent increase. The lowest-priced Meebits NFT increased in value by 30 per cent to 5.5 ETH or USD 14,500.
Even Larva Labs’ controversial ‘V1 CryptoPunks Wrapped’ collection got a boost on secondary markets. Though it was based on a faulty version of the original CryptoPunks smart contract, the user-generated Ethereum NFTs saw am eye-watering spike in sales, rising by an unbelievable 6,690 per cent in the week after the Yuga Labs IP sale was announced. The fact that Larva Labs had disavowed the flawed project didn’t faze trader, who shelled out more than USD 1.7 million for the dodgy NFTs in under a week.
Before the IP sale, Larva and Yuga were the two biggest players in the NFT space. Having merged the market’s two main collections under one owner, a period of market consolidation may have begun.
The two companies were known for treating their collections, and NFT holders, very differently. Larva was one of the first to get behind the Ethereum NFT market, though the project’s leaders seemed content to ride the wave when the overall crypto market went full-bull in 2021.
Yuga Labs saw the crypto surge as a signal that change was afoot and changed its model, becoming similar to a members-only club and adding exclusivity and cachet to its NFT products.
That move, and the celebrity endorsements that came rolling in as a result, changed the game. Perhaps seeing that it had made a strategic error, Larva sold the IP. Now both companies find themselves once again riding the whims of crypto market volatility.