Published: May 22nd, 2024
The entry-level price for NFTs in the once-popular Bored Ape Yacht Club (BAYC) collection has been sinking steadily since January, handing at least one unlucky trader millions in losses.
Pseudonymous crypto market watcher Cirrus recently revealed that an unknown NFT trader purchased more than 100 Bored Ape NFTs when the collection prices sank to levels not seen since 2021.
From mid- to late-January, the anonymous trader used the Blur NFT marketplace to sweep up 110 of the lowest priced Bored Apes on offer and has purchased another 10 since. All the Apes were snapped up for between 22 and 25 ETH, for an average price of roughly USD 56,000 per NFT.
At the time, those must have looked like fire sale prices. At their peak, Bored Ape NFTs were sought after by sports and television celebrities, with floor prices reaching as high as USD 429,000 at one stage in early 2022. Some highly-sought-after iterations sold for millions of dollars each.
By later 2022, however, the shine began to wear off. A crypto bear market began and drained Bored Ape of its allure. While a few of the NFT ecosystem’s original leaders like Cryptopunks have managed to sustain their value, Bored Ape has steadily seen values wane.
At time of writing, figures from CoinGecko showed the floor price for Bored Apes NFTs (the lowest price available for an NFT in the collection) at close to 13 ETH, or USD 41,000. That leaves the anonymous trader with a potential loss of around USD 1.85 million. He or she has sold a handful of the NFTs since, but still holds 106.
While all of the big name Ethereum NFT collections saw their valuations crater amid the wider crypto market crash in 2022, BAYC competitor CryptoPunks was one of the first to fight back. Following two multi-million-dollar sales in rapid succession, the minimum or ‘floor’ price for one of the project’s NFTs has rose substantially in July 2022.
It jumped to above USD 100,000 for the first time since the crypto crash began. Data from NFT Price Floor showed the lowest price for CryptoPunks to be 84.84 ETH, or about USD 113,000.
That meant the entry-level price for CryptoPunks had leapt by more than 30 per cent in a week.
The rising value of Ethereum, up 27 per cent over the previous seven days, was part of the story. However, when measured against ETH, the CryptoPunks floor beat Ether's rise by nearly 12 per cent over the week and by nearly 26 per cent over the month.
It didn’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 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 has been one of the most successful and resilient 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 mid-2022 leap in floor price was triggered by a pair of multi-million-dollar sales in July. 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 the news was, the slumping NFT market was a long way from a turnaround. CryptoPunks had lost significant value over the course of the year. On January 3rd 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 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.
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.