Published: February 22nd, 2023
NFT’s look to be back in vogue after a rapid rise in Ethereum NFT volumes. Trades more than doubled over the past week in an evolving environment that saw challenger NFT marketplace Blur race past OpenSea, the former market leader.
New data from DappRadar suggests traders are rapidly flipping valuable NFTs. Blur has been the main beneficiary, logging USD 460 million in Ethereum NFT trades in the same period for 360 per cent jolt over the previous week. OpenSea posted a 12 per cent rise in trading volume to USD 105 million in the same period. Runner-up marketplace X2Y2 came in third with ca. USD 11 million in trades.
DappRadar says there has been a week-over-week rise in Ethereum NFT trading volume of more than 150 per cent. The surge began in the same week that Blur airdropped its BLUR governance token, enabling NFT traders to earn rewards in Blur’s marketplace.
At its current price (at time of writing) of USD 1.20 per token, BLUR’s performance suggests that some NFT collectors have taken their airdropped funds and poured them back into NFTs. Perhaps incentivised by the airdrop, they also seem to have rewarded Blur by using its marketplace to buy and sell most of their NFTs.
It’s worth noting however that the surge at Blur isn’t being primarily driven by traders simply flipping their BLUR tokens for high-value NFTs. That kind of activity is being driven by NFT ‘whales’ with major NFT holdings. They appear to be flipping NFTs at even greater frequency than before, likely to improve their position when future token reward allocations are on the cards.
While all of the big name Ethereum NFT collections saw their valuations crater last year amid the wider crypto market crash, one or two premium collections were still able to benefit. After two multi-million-dollar sales in July of 2022, CryptoPunks saw its floor (minimum) price rise substantially over a period of 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 May 2022. Data from DappRadar showed the floor price for CryptoPunks at 84.84 ETH, or about USD 113,000 at time of writing.
That meant the entry-level price for CryptoPunks leapt by more than 30 per cent in a week.
Rising Ethereum prices were part of the story. However, when measured against ETH, the CryptoPunks floor beat ETH’s rise by nearly 12 per cent for the week and by nearly 26 per cent over the month.
It doesn’t signal a market-wide uptrend for high-value NFTs, however. Bored Ape Yacht Club saw its ETH floor price fall by five per cent in the same period.
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.
To this day, CryptoPunks remains 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.
The leap in floor price seen in July 2022 was triggered by a pair of multi-million-dollar sales. 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 was, the slumping NFT market remianed in the doldrums. It has yet to climb back to its previous highs. Even at its current floor price, CryptoPunks had lost significant value over the course of 2022. In January 2022 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 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.
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 crypto market boom began in 2021.