Key Takeaways:
- In 2017, the creators of CryptoPunks introduced a collection of 10,000 unique characters on the Ethereum blockchain, all free.
- Due to the lack of robust demand, the project started slow. It gave free NFTs to anyone who wanted one.
- Notably, the price of CryptoPunks portraits depends on the supply and demand of the asset.
Non-fungible tokens (NFTs) have quickly gained traction and received much social media attention over the past year.
Various celebrities, artists, and creators are launching new projects to satisfy the growing appetite for these assets.
The history of the Ethereum blockchain dates back to 2015. Since then, various NFTs have emerged and contributed to the development of the blockchain.
One of the earliest and the most popular NFTs is the CryptoPunks collection. The demand for this limited-quantity, unique, and rare token grows.
What Are CryptoPunks?
Over the past few months, the popularity to buy CryptoPunks has been on the rise. From the sale of a rare bundle of art at Christie’s for $17 million to the auction of a Punk described as a creature that looked like an alien, it is clear that this NFT collection is very sought after.
In 2017, the creators of CryptoPunks introduced a collection of 10,000 unique characters on the Ethereum blockchain, all free. There are 24 apes, nine aliens, 3,840 females, 88 zombies, and 6,039 male Punks. Each of these NFTs has unique features such as beanies, 3D glasses, and lipstick.
CryptoPunks 30-day activity: DappRadar
When the founders first introduced them, CryptoPunks were free for anyone to grab — considering the low ETH fees, until enthusiasts minted them all.
However, in 2020, NFTs exploded and gained attention, causing the demand for CryptoPunks to rise, and hence their price shot up. In January alone, 2022, CryptoPunks gained over $2.5 billion in OpenSea volume traded.
The CryptoPunks Background
Unlike the other projects it inspired, the founders did not design CryptoPunks to create a community. Instead, it was an experiment that John Watkinson and Matt Hall started.
During its creation, the NFT space was in its infancy. Due to the lack of robust demand, the project started slow. It gave free NFTs to anyone who wanted one, and those who had already invested in crypto were limited to collecting one.
Eventually, demand started to increase as more people learned about the project. It wasn’t an overnight sensation, but it was a steady process.
Early supporters of the project, such as SeedPhrase, DaveDave, and Pranksy, were early adopters of cryptocurrencies. They got onboard with the idea, stating, “Owning assets on the blockchain is very valuable.”
Early NFT Collection Equals High Value?
High demand for a commodity raises its price, and in the case of CryptoPunks, it is no different. Currently, CryptoPunks are quite expensive and so appealing. Some factors have gotten this ancient NFT to its current position;
Age
The CryptoPunks collection is indeed one of the oldest NFT projects. An aged project such as this is valued as highly as a painting by Picasso, “Femme nue couchée au collier” of 1932, purchased and tokenized by Justin Sun.
Historical Significance
Some people argue that owning a Punk is like betting on the importance of the Ethereum blockchain.
Most of the early supporters of CryptoPunks were people involved in the crypto world before the founders even launched the project. Due to its historical significance, the project gains high value. It represents a belief in the Ethereum blockchain.
Scarcity
The value of an NFT has a lot to do with its scarcity. For instance, if one creator wants to make a replica of the same NFT, another might want to create a rarer one.
Since you can use the creator’s unique IDs to verify the authenticity of the NFT, you can value the item according to its scarcity.
Due to the scarcity of CryptoPunks, people tend to pay high prices. It is because there are no two CryptoPunks that are alike.
Popularity
The popularity of a product or service increases its purchase desire, increasing its price. For instance, when Larva Labs released CryptoPunks, it was available for free. However, they are worth millions to those who can even afford them.
CryptoPunks has been featured in various publications, such as The New York Times and Christie’s of London, and added even more to its popularity.
Various celebrities, such as Jay-Z and Serena Williams, have joined as enthusiasts for these NFTs. These celebrities, among others, have used CryptoPunks images as profile pictures, hence drawing more attention to the NFTs.
CryptoPunks Prices Are Quite High
The price of CryptoPunks NFTs varies depending on the market. The lowest price that you can find is below Ξ80, at Ξ72. However, some are more expensive;
CryptoPunk #5822: $23.7 Million
On February 12, 2022, CryptoPunk #5822 hit the top spot on CryptoPunks collection prices when sold for around Ξ8000. At that time, its value was approximately $23.7 million.
Comparatively, the most expensive NFT collection ever sold is the Pak’s “Merge,” for $91.8 million.
CryptoPunk #5822’s new owner, Deepal Thapliyal, is the CEO of a blockchain startup known as Chain. He also previously purchased a rare NFT from the Mutant Ape Yacht Club for $5.8 million in January 2022.
CryptoPunk #7523: $11.8 Million
This CryptoPunk, also known as Covid Alien, is an alien variety featuring a surgical cap, a mask, and teal-colored skin. From the collection, only nine are alien Punks, making them very scarce.
CryptoPunk #4156 ($10.26 Million)
In December 2021, an investor paid $10.26 million for a rare ape Punk known as CryptoPunk #4156. This NFT is the second-most expensive ape Punk ever sold.
Controversies?
Despite the project’s success, the team behind Punks isn’t immune from controversies. In 2022, John Watkinson, one of the founders of Larva Labs, sold his stake in V1 CryptoPunks.
Days after selling the project, Larva Labs tried to blacklist V1 Punks, which would have caused the price of the token to plummet. It would have affected everyone who bought the NFTs from him.
On the other hand, he kept all of the money that he made from the sale of V1 Cryptoks. It allowed him to avoid losses from the price decline.
The community had different opinions on whether or not Larva Labs was right to sell the project. Some people thought that the company was merely doing it out of spite, while others thought it was a mistake.
Others criticized Larva Labs for failing to address the project’s issues adequately. They also believed that the company only sold the project after Watkinson had already left.
Larva Labs also faced criticism from the NFT community for allegedly targeting other projects that weren’t as fraudulent as it was. The community also criticized it for failing to provide adequate information about the rights holders of the CryptoPunks NFT.
Are CryptoPunks the Best NFT To Buy in 2022?
CryptoPunks floor price: NFT Price Floor
Since January 2022, the number of people interested in NFTs has declined. The number of monthly buyers decreased to below 800,000 in January, the lowest level since the start of the NFTs market.
The number of secondary sales has also decreased. From a high of 38,000 in January to around 7,900 in September, the average sales volume has dropped to 103,765 per day.
One clear thing, though, is that NFTs are here to stay. Despite different founders launching various projects in the past few years, including Art Blocks, Bored Ape Club, and more, the community still regards CryptoPunks as one of the most significant collections in the market.
Due to the limited number of people who can afford to buy cryptocurrencies, the value of this collection might increase as time goes on.
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The Effect of Yuga Labs Acquiring CryptoPunks
On March 12, 2022, the creators of Bored Ape NFTs, Yuga Labs, announced that they had acquired the rights to CryptoPunks and other NFTs from Larva Labs.
The acquisition and ownership change of the NFTs of the CryptoPunks by Yuga Labs did not lead to any change. Larva Labs predicted that the company would grow under the leadership of Yuga Labs.
The price of CryptoPunks spiked just after the announcement raising the floor price to over Ξ70, which it has since maintained. Investors showed signs of grown interest in the project and a surge in investor confidence.
The Future of CryptoPunks
During the COVID-19 pandemic, the popularity of cryptocurrencies and the increasing interest in blockchain projects skyrocketed prices.
Notably, the price of CryptoPunks portraits depends on the supply and demand of the asset. With the supply fixed, CryptoPunks are bound to increase demand and hence, higher prices.
Notably, these NFTs may shift the market’s focus from fringe projects to mainstream art. This move could also bring in new buyers for the NFTs.
As for 2022, the most expensive CryptoPunk was sold for Ξ8000, $23.7 million. CryptoPunks could break this ATH this year if the general crypto market remains bullish.
However, it is still hard to speculate on the market due to its high volatility. One can only wait and see what happens in the future.
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